The EUR/USD currency pair is demonstrating a lack of clear direction as it remains stuck within a trading range that has persisted for several days. Given this mixed technical backdrop, traders are advised to exercise caution before making any decisions regarding the short-term movements of the pair. Attention is particularly focused on the upcoming flash German Consumer Price Index (CPI) data and the speech from the Federal Reserve Chair, which may provide the necessary impetus for movement.
Currently, the EUR/USD is hovering around the 1.1160 level, showing little change from the previous session, despite a slight recovery from the support levels between 1.1125 and 1.1120 last Friday. This stability is seen as traders await key economic indicators that could influence market sentiment.
From a technical standpoint, the ongoing price movement can be interpreted as a bullish consolidation, especially with the upward bounce from the psychological support level at 1.1000, which marked a monthly low. However, concerns are mounting as the pair has struggled to maintain momentum, particularly in light of repeated attempts to surpass the 1.1200 level, leading to the formation of a bearish double-top pattern. Traders may want to hold off on bullish positions until a decisive breakout above this trading range can be confirmed.
In terms of resistance, the 1.1200 level is likely to pose a significant challenge, with the next notable barrier at 1.1215—a peak observed last Wednesday. If buying momentum builds, it could propel the EUR/USD towards the 1.1275 region and potentially further to levels above 1.1300. Conversely, a move below the support levels of 1.1125-1.1120 may lead to a decline towards the 1.1100 region and lower, targeting the 50-day Simple Moving Average near 1.1030. A breach of the 1.1000 level would indicate a bearish shift in market sentiment.
