EURUSD has been trending higher recently but looking at the longer-term time frames shows that the pair is actually hitting the top of its range. On its daily chart, it can be seen that the pair has found resistance around the 1.1450-1.1500 levels and support at 1.0550. If the range resistance holds, another move towards support could be in the cards.
However, the 100 SMA is still above the 200 SMA on this time frame, signaling that the path of least resistance is to the upside. This suggests that an upside breakout from the range could be seen, potentially taking the pair up by an additional 1,000 pips or the same height as the chart formation.
Stochastic is already pointing down to show a potential return in bearish pressure. RSI is also starting to head south even without reaching the overbought area so EURUSD might follow suit.
Data from the euro zone has been mostly stronger than expected recently, allowing the shared currency to advance against the dollar. The US currency has been weighed down by weak NFP results last week, causing traders to price in lower odds of a Fed rate hike this month or the next.
Still, the ECB has been pretty downbeat, announcing lower than expected upgrades to growth and inflation. The central bank also pointed out that there are several uncertainties on the horizon, one of which is a potential Brexit which might bring additional troubles to the region.
Brexit polls indicating a lead in favor of those voting to leave the EU have also been weighing on the euro lately while surveys showing otherwise have provided some support. Still, the next few weeks could be volatile for the pairs as traders position ahead of the EU referendum. Only the US preliminary UoM consumer sentiment index is due today.
To contact the reporter of the story: Samuel Rae at firstname.lastname@example.org