EUR/USD Price Analysis: Bull pennant in play above 200-SMA

• EUR/USD picks up bids after a subdued performance on Monday.
• Sustained trading beyond 200-SMA favors bulls to target 61.8% Fibonacci retracement as nearby aim.
• Weaker Momentum line challenges the up-moves but pennant confirmation could propel the buyers.

After a dull start to the week, EUR/USD gains upside momentum, poking 1.1875 amid the early Tuesday morning in Asia.

In doing so, the major currency pair portrays a bullish pennant above the 200-SMA on the four-hour (4H) chart. It should be noted, however, that the recently weaker Momentum line tests the bulls. Hence, the pair traders seem to wait for confirmation for fresh positions.

Given the pair’s sustained trading beyond 200-SMA, the bullish chart pattern’s confirmation, requiring a clear upside break of 1.1900, seems more likely.

Following that, the quote may take a breather around 1.1910 before rallying towards the theoretical target of 1.2060. During the rise, late June’s peak surrounding 1.1975 and the 1.2000 threshold may offer intermediate halts.

Meanwhile, a downside break of 200-SMA level of 1.1850 will quickly drag the EUR/USD prices to July 22 tops surrounding 1.1830 before directing sellers to the 1.1800 round figure and the previous month’s bottom near 1.1750.

In a case where the pair bears remain dominant past 1.1750, the yearly low close to 1.1700 will be important to watch.

EUR/USD: Four-hour chart

Trend: Further recovery expected