Bulls pause post-rally
- EUR/USD edged higher to around 1.0830 after Monday’s European trading session, managing to post modest gains.
- Following last week’s impressive surge of over 4%, the pair appears to be taking a breather, potentially finding stability above its 200-day SMA, which sits near 1.0780.
- While technical indicators still lean positive, the RSI is ticking down from overbought levels, suggesting that the upward momentum might be losing some steam.
The EUR/USD pair continued its positive trend on Monday, inching up to the vicinity of 1.0830 after the European markets closed for the day. Even with these slight gains, it seems like the pair might be entering a period of consolidation after its powerful rally last week, where it jumped by more than 4%. This recent pause could indicate that buyers are taking a moment to reassess their positions, especially as technical signals hint at a possible cooling-off period in the near term.
Looking at specific indicators, the Relative Strength Index (RSI) is still showing overbought conditions. However, it has begun to dip slightly, which could be a sign that the upward pressure is beginning to ease. Meanwhile, the Moving Average Convergence Divergence (MACD) is still displaying rising green bars, which suggests ongoing buying interest, although perhaps at a more moderate pace. Given this mix of signals, any further significant gains might be limited in the short run unless new factors come into play.
When considering potential downside support, the 200-day Simple Moving Average (SMA) at 1.0780 stands out as a crucial level to watch. This could act as a floor for the price, potentially halting any declines. Should the price decisively break below this SMA, we might see a move downwards towards 1.0750. Turning to the upside, immediate resistance seems to be around the 1.0850 area, with tougher obstacles anticipated closer to the 1.0900 level.
