It was a difficult ride for EUR/USD last week, but nevertheless, the pair managed to close the week in the green. It has been the fifth week in a row when the 1.1510 support level proved to be too much for EUR/USD bears to overcome. We notice that the pair started ranging, between the 1.1510 and 1.1840 levels. We believe that this is the area where EUR/USD could be trading in during this week, until it decides which of the sides to break. For now, we will remain neutral and continue observing the price action within the aforementioned range.
OUTLOOK (SCENARIO A / B)
If the bulls decide to drive the pair above the key resistance area of 1.1725, this could open the path towards the upper side of the aforementioned range at the 1.1840 mark. A break above that level could be interpreted by the bulls as a potential change in direction, at least in the short run, which could lead to higher areas, like the psychological 1.2000 zone.
On the downside, a move back to the 1.1510 level, which is the lower side of the previously mentioned range, could put us on high alert again, as the potential for a break of that level could become a possibility. If this break happens and we see the daily candle closing below that level, then this could be a real feast for the bears, who in their case could drive EUR/USD lower towards the 1.1435 mark. Below that, a good area of support could be the 1.1310 obstacle, marked by the low of the 5th of July last year.
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