EURUSD maintains a neutral bias in the short term as it continues to trade sideways in a range of 1.1100 and 1.1220.
Downside risk exists as the daily RSI remains below 50 in bearish territory. Immediate support is provided by the 200-day moving average at 1.1095, while below this the 50% Fibonacci at 1.1067 (retracement of the upleg from 1.0520 to 1.1615) is an important level. A break below this level would shift the pair’s longer-term bias, which was in an uptrend from 1.0520 to 1.1615. A decline in prices below the 50% Fibonacci would risk a reversal of this December to May uptrend, with scope for the market to fall towards the 61.8% Fibonacci at 1.0938.
Alternatively, if prices break above the range high of 1.1220, the next barrier to the upside lies at the key 1.1300 level, which also coincides with the 50-day moving average. Clearing this resistance area would bring EURUSD back to bullish and as prices rise, there is scope to retest the May high of 1.1615.
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