EUR/USD is Struggling to Regain Bullish Momentum; Will it succeed?
The H4 chart outlook of the currency pair EUR/USD shows some signs of rejection of lower prices. The appearance of a bullish pin bar candlestick after two red candles is giving hope that the prices will recover in the short term. The EUR/USD prices apparently failed to re-enter the ascending channel, but will they succeed in retreating?
EUR/USD Technical Analysis
Currently, the prices are hovering between the 50-period Simple Moving Average and the 20-SMA line, with prices moving up towards the 20-SMA. This level is also closer to the 23.6% Fibonacci Retracement level of the prevailing surge from the $1.05132 low to the $1.10754 high. The last bullish pin bar candlestick fell to the 100-SMA level, where the second support formed after the initial support at the 23.6% Fibonacci Retracement level. Any break below this level would drag the prices toward the next support, which is forming at $1.00614 and coincides with the 38.2% Fibonacci Retracement level.
However, on the upside, the prices are facing first resistance at the lower band of the ascending channel. A closing price above this level would form the next resistance at the mid-level of ascending channel at 1.10273. A climb above this resistance level would trigger further gains towards the higher band of the ascending channel, which coincides with the 0.0% Fibonacci Retracement level.
The Relative Strength Index gives a reading of 47 which is below the mid-level. However, the wing of the RSI line is pointing to the upside, giving hopes for a possible uptrend ahead. Meanwhile, the Stochastic Oscillator is also standing in the middle, indicating the neutral behavior of market participants. Furthermore, the MACD histograms are still forming below the zero line, suggesting EUR/USD pair might take some more time to revert back to the bullish trend.
Given the technical analysis of the H4 chart of EUR/USD, it is suggested to wait for a clear signal indication before entering the market. Therefore, if prices manage to break above the lower band of ascending channel, then a long position can be taken. However, any break below the 100-SMA line could open an opportunity for a short position in the market.
Daily Technical Levels
Pivot Point: 1.0959