EUR/USD has fallen to a key level of support after falling short of the 1.2400 psychological level late last week. With a range of high impact economic events on the horizon the big question is whether bears can continue to push, or whether Fibonacci support will be able to contain the lows.
While the probability of additional fiscal stimulus for the US has been priced into the market, higher treasury yields have helped buoy US Dollar strength, pushing EUR/USD price action into a confluent zone of support that came into play several times throughout December 2020.
EUR/USD Technical Analysis
After recovering from March 2020 lows, the upward trend pertaining to EUR/USD prevailed, eager to test the 2018 high. However, following a test of the upper bound of the Bollinger Band combined with the formation of a tombstone doji, EUR/USD bears were able to push prices lower until reaching a critical zone of support at 1.2134.
EUR/USD Weekly Chart
For now, prices remain in a short-term range-bound state, with the Moving Average Convergence Divergence currently resting below the zero line, a potential indication that bearish momentum may prevail. Meanwhile the Relative Strength Index (RSI) is within range, but remains faithful to the lower bound, at least in the short-term.
EUR/USD 4 Hour Chart
Should bulls take charge once again, a break above the key psychological level of 1.2200 could result in bullish continuation