Range Markets

EUR/USD trades above the 50-day Simple Moving Average (SMA) amid bullish signals on the daily chart indicators.

The 14-day Relative Strength Index has charted an inverse head-and-shoulders breakout, a bullish reversal pattern, implying an end of the corrective pullback from January highs and resumption of the uptrend.

The MACD histogram, an indicator used to gauge trend changes and trend strength, is producing higher bars below the zero line, indicating a strengthening of the upward momentum.

As such, the pair’s latest move above the 50-day SMA at 1.2152 looks sustainable. The SMA hurdle has proved a tough nut to crack multiple times since Feb. 10.

The immediate resistance is now located at 1.2190 (Jan. 22 high),  followed by the January high of 1.2349. A failure to keep gains above the 50-day SMA would shift risk in favor of a drop to 1.21.


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