- EUR/USD edges higher for third straight day.
- But unable to break past range ceiling.
- Upside momentum gathers some strength.
EUR/USD has been trading sideways ever since its rebound attempt on December 20 faltered. The range ceiling can be found just below 1.0450, while the floor has been formed slightly above 1.0380. The momentum indicators suggest that an upside breakout is more likely than a downside one as the RSI has snapped the series of lower highs and is inching higher and the stochastic oscillator is headed towards the overbought region.
However, the strengthening positive bias is only mildly reflected in the price action and the short-term sideways range doesn’t seem under threat just yet.
Should EUR/USD manage to rise above the range ceiling, there’s likely to be some resistance around the 20-day simple moving average (SMA) at 1.0468. Surpassing it would put the pair on a more convincing upward path, bringing into view the recently congested 1.0530 region. Higher up, the next big test for the bulls would be the 50-day SMA just beneath the 1.0600 level.
On the flip side, the range floor of 1.0380 is the immediate support that needs to be tackled by the bears before revisiting the November 22 low of 1.0331. Breaching that too would reinforce the medium-term downtrend, turning the attention to the 1.0300 level.
In brief, the current positive momentum is too feeble to push the price above the short-term sideways range and the medium-term outlook remains decisively bearish. Only a climb above the 50-day SMA can weaken the negative picture.