EUR/USD Trading Between 1.36 and the 200-Day SMA

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EUR/USD edged lower this week slowly extending a bearish swing that started from the high on the year, 1.3993.

EUR/USD Daily Chart
eurusd daily chart 5/30

This week,eur-usd price fell below the 200-day simple moving average, to a low of 1.3586. As we get into the Friday US session, traders are trying to defend the 1.36 level, and the EUR/USD crept back above 1.36.

Note that the 1.3650 level is where the 200-day SMA resides. If this level acts as resistance, the trend remains clearly bearish in the short-term, and the 2014-low at 1.3475-80 will still be in the scope.

EUR/USD 4H Chart
EUR/USD 5/30

The daily RSI is near oversold levels, and the 4H RSI is in an extended bullish divergence, a showing that the bearish swing has slowed down, though still intact.

If we see a push above 1.3650, we should anticipate at least some further short-term bullish correction, especially if a subsequent bearish attempt fails to return south of 1.36.

This bullish correction outlook should have a maximum expectation to 1.3775. This is a key support/resistance pivot, and where the 50-day SMA resides. A break above 1.38 might bring back the bullish outlook.

Otherwise, if the bullish correction fizzles below 1.3775, the market remains sideways-bearish, with the 2014-low in sight.

To contact the reporter of this story, email Fan Yang at fan@forexminute.com
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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.