Forex Technical Update
The EUR/USD has essentially established a consolidation range between 1.3385 and 1.3250. 4/2 US trading brought the pair below a rising support that goes back to the 1.30 March low, seen in the 4H chart. However, this did not follow through, and the market continues to trade sideways instead of a bearish correction. The 4H RSI reading is near 50, reflecting non-directional momentum.
The 1H chart shows that the momentum is neutral as well, but there is a some short-term bullish bias present. Note that price continues to respect the 200-hour simple moving average. It has done so on 3/22, 3/29, and 4/2, and is not again respecting in during the 4/3 European-US trading session overlap. Another observation is that the market is really losing conviction on a direction as we see lower high and higher lows (converging trendlines forming a triangle).
Still, a break from this triangle would still be a premature indication of direction. After the reaction to the ECB meeting, a break above 1.3385 will be needed for a bullish outlook, while a break below 1.3250 will be needed for a bearish outlook. Ahead of the ECB meeting, these levels should be seen as resistance and support respectively, with the consideration that there is some bullish bias (if 1.3385 breaks, 1.34 might still offer psychological resistance).
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist of FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.