Decisive Time for EUR/USD Between 2 MAs

EUR/USD is bouncing between 2 MAs now, trying to decide which direction it will take

Skerdian Meta•Tuesday, February 9, 2021•1 min read

The 20 and 50 SMAs are providing resistance at the top

EUR/USD has been bullish since May last year, when the ECB announced the PEPP programme worth trillions of Euros, which has been only increasing since then. We saw a slight retrace during September and October, but the bullish trend resume after the US presidential elections.

The retrace lower began after buyers failed to push the price above the big ro0und resistance level at 1.20. But, they managed to break the resistance zone at 1.20 by the middle of December and EUR/USD reached 1.2350 in the first week of January.

Although, we saw a reversal down in the second week of January which lasted until Friday last week. This pair found support at the 100 SMA (green) on the daily chart around 1.1950 and bounced off of it. EUR/USD has moved above 1.20 again now but the 50 SMA (yellow) and the 20 SMA (gray) are providing resistance at the top, above 1.21.

So, EUR/USD traders are trying to decide now whether to keep the long term bullish trend or reverse down from here and continue the bearish retrace, which would eventually turn into a bearish trend. But, the moving averages will decide, whichever breaks first will signal a continuation in that direction.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Open a FREE Trading Account

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.