EURUSD fiercely ascends to 2-month downtrend line; pauses at 38.2% Fibonacci

EURUSD appreciated, taking back more than half of two weeks of losses. The bulls are eyeing the downtrend line, but it seems that the move up has hit a ceiling as the upside momentum has evaporated, something also indicated by the RSI as it has flattened at the 50-level.

The 200- and 100-day simple moving average (SMA) are declining slightly sideways, whereas the 40-day SMA has dropped and merged with the downtrend line implying that the bearish bias is prevailing also in the short-term. Furthermore, the MACD although slightly above its red trigger line in the negative region, suggests that some downside movement cannot be ruled out.

In the negative scenario, if 1.1163 holds, which is the 38.2% Fibo retracement level of the up move from 1.1026 to 1.1249, and the bears push through the 50.0% Fibo of 1.1140, support could come at the 61.8% Fibo of 1.1111. Next is the revisit of the 1.1080 tested but holding barrier which is the 76.4% Fibo. If the level is breached the low of 1.1050 would need to give way for the twenty-six-month low of 1.1026 to be considered.

If the bulls manage to move above the 38.2% Fibo of 1.1163, resistance could come at the 40-day SMA and downtrend line located around the 1.1180 level. Penetrating higher could see the 1.1196 – 1.1200 resistance area apply the brakes before the 100-day SMA lying at 1.1215. If the ascent persists the swing high of 1.1249 could come into play.

Overall the medium- and short-term bias is bearish, but a close above 1.1285 could turn the bias back to neutral.