EURUSD has completed two consecutive positive trading days following the rebound on the lower Bollinger band, which holds near the 1.2160 support level. However, currently, the pair is moving slightly lower below the 20 and 40 simple moving averages in the daily chart.
Remaining in the short-term chart, technically, the momentum indicators are endorsing the recent downside pressure. The RSI indicator is sloping south near the 50 level, while the MACD oscillator is falling below the trigger line but is still above the zero line. Moreover, the 20-SMA is ready to post a bearish cross with the 40-SMA, suggesting a bearish bias.
If price action remains below the 1.2300 psychological level, there is scope to test the 1.2200 handle and next, the 1.2160 support barrier. Clearing these key levels could see additional losses towards 1.2080, which coincides with the 23.6% Fibonacci retracement level of the upleg from 1.0560 to 1.2540.
On the flip side, if prices successfully surpass the 20-SMA at 1.2320, then the focus could shift to the upside again and the price could challenge the upper Bollinger band near 1.2470. From there, EURUSD could be on the path towards the 1.2540 resistance level.
It is worth mentioning that the world’s most traded currency has been developing with an ascending movement since April 2017 and tested the diagonal line several times in the past.