EUR/USD Price Analysis: Battling critical daily resistance line at 1.1840

• EUR/USD struggles to extend the uptrend amid a pause in USD sell-off.
• Bulls need a daily close above the falling trendline resistance at 1.1840.
• The upside remains compelling for EUR/USD amid bullish RSI.

EUR/USD is fighting hard to reclaim the 1.1850 psychological barrier in early European trading, as the US dollar holds onto its overnight recovery mode from monthly lows.

Markets are in a wait-and-see mode ahead of the all-important US NFP report due on the cards this Friday. A big miss on the US ADP jobs data fuelled a broad dollar sell-off, providing extra legs to the recent uptrend in the main currency pair. The spot also remains underpinned by the latest hawkish European Central Bank’s (ECB) commentary.

ECB Vice-President Luis de Guindos expects the Euro Area recovery “to be fairly strong in the third and fourth quarters,” suggesting that the Governing Council will adjust the forward guidance over the coming months as the “European economy will be able to recover its pre-pandemic income levels by the end of this year or the beginning of next year.”

Looking at EUR/USD’s daily chart, the price is looking to extend its bullish momentum above the two-and-a-half-month-old falling trendline resistance at 1.1840.

A daily closing above the latter is needed to initiate a fresh upswing towards the July highs at 1.1908. Ahead of that Wednesday’s high of 1.1857 could get retested.

The 14-day Relative Strength Index (RSI) is pointing north above the midline, allowing room for the additional upside.

EUR/USD: Daily chart

Alternatively, any retracement could meet initial demand at the bearish 50-Daily Moving Average (DMA), which is aligned at 1.1807.

The 21-DMA at 1.1762 will be next in sight for the bearish traders. Further south, August lows of 1.1704 could emerge as key support.

EUR/USD: Additional levels to consider