The EURUSD bias remains tilted to the upside after yesterday’s pullback stalled in the swing area between 1.1498 and 1.1506. Buyers defended that support zone, the price held above the rising 100-hour moving average, and the pair went on to close higher. Today’s advance has extended that momentum, with the EURUSD up 0.22% and trading near the session high at 1.1557, just shy of Monday’s high at 1.1558.
A break above that high would give buyers another small victory, but the technical road becomes much more challenging from there. The 100-day moving average at 1.15686 is the next major hurdle, followed closely by the 50% retracement at 1.1586. That retracement also aligns with the upper end of a swing area dating back to May (see the red circles on the chart below), adding to its technical significance.
Retracements rarely move in a straight line, and this one is no exception. Progress often comes in baby steps, with each resistance level requiring buyers to prove themselves before the next target comes into view. The cluster of resistance ahead creates a technical minefield that gives sellers several well-defined levels to lean against while keeping risk relatively contained.
For sellers looking to fade the rally, the area between the 100-day moving average and the 50% retracement offers an attractive risk-versus-reward setup. Stops can be placed above that resistance zone, while the initial downside target would be a move back toward the 100-hour moving average at 1.1523. A break below that support would strengthen the bearish case and could invite additional selling pressure.
The bottom line: The bias remains higher for now, but buyers are approaching a formidable band of technical resistance. If they can push through it, the upside outlook improves. If not, sellers have a well-defined area from which to make their stand.
This article was written by Greg Michalowski at investinglive.com.