EUR/USD Facing Support at 1.2050s, as the 100 SMA Keeps it Down

The EUR/USD has been massively bullish since May last year, after the ECB announced the start of the PEPP program, although, for political reasons in the US, the main driver for this was the increased weakness in the USD last year.

The EUR/USD broke above 1.20 towards the end of 2020, while in the first week of January, it moved above 1.23. But, it seems like the pressure has shifted to the downside since then. The EUR/USD reversed down in the second week of this year, breaking below the 100 SMA (green) on the H4 chart, which has been keeping it down since then.

The 200 SMA (purple) provided support for a short period, and we saw a bounce, but it didn’t last long before the price reversed back down. This moving average has been the ultimate resistance since then, reversing it again last Friday. However, buyers are now facing the support area above 1.2050, which has been holding for a couple of weeks. If the sellers push above it, then 1.20 comes into play.