EURUSD on course for positive correction

EURUSD is in progress to create a bullish retracement following the pullback from the 10-month low of 1.1510 support level. The aggressive bearish movement, especially in the previous seven weekly sessions, has snapped during the past week, completing a bullish candle. Moreover, the momentum indicators in the near-term are supportive for the bullish correction.

From the technical point of view, in the daily timeframe, the RSI indicator is sloping slightly to the upside near the threshold of 50, while the MACD oscillator jumped above its trigger line and is rising in the bearish territory.

Immediate resistance is being provided by the 1.1820 level and the price successfully surpassed the 20-day simple moving average (SMA). Should prices jump higher, the next resistance would likely come from the 1.2000 psychological barrier but the pair first needs to climb above the 40-day SMA near 1.1900. As a side note, the 200-day SMA stands around 1.2010, near the aforementioned psychological level.

On the downside, EURUSD would likely meet support at the 38.2% Fibonacci retracement level of 1.1710 of the upleg from 1.0340 to 1.2540. A break below this significant level would endorse downside pressure and challenge the 10-month low near 1.1510. Steeper declines should drive the common currency until the 50.0% Fibonacci of 1.1450.

In the longer timeframe, the bullish view has turned to bearish, however, should price pare the previous weeks’ losses, this would risk shifting the long-term picture to a positive one again.