EUR/USD Price Analysis: Range play extends around 21-DMA ahead of Fed, ECB

• EUR/USD is defending 21-DMA starting out a key week on Monday.
• US dollar licks its inflation-inflicted wounds ahead of the Fed.
• The pair awaits a symmetrical triangle breakout for a clear direction.

EUR/USD is trading on the front foot on the first trading day of this week, having recaptured the 1.1300 level amid the extended weakness in the US dollar across the board.

Tame US inflation combined with looming uncertainty over the Omicron covid variant keep investors on the edge, as they brace for the Fed and ECB monetary policy decisions this week.

The Fed-ECB monetary policy divergence could check the rebound in EUR/USD going forward.

Technically, the spot is holding ground the 21-Daily Moving Average (DMA) at 1.1295 after yielding the weekly close above it.

The 14-day Relative Strength Index (RSI), however, remains flatlined below the 50.00 level, suggesting limited upside potential.   

Therefore, a daily closing below the 21-DMA will reinforce the selling interest, opening the downside back towards the rising trendline support at 1.1245.

The next target for EUR bears is seen at the 1.1200 level. Further south, the yearly lows of 1.1185 could be put to test once again.

The bearish momentum would suggest a three-week-old symmetrical triangle breakdown.

EUR/USD: Daily chart

On the flip side, A test of the 1.1350 psychological level, if the 21-DMA support holds. That level is where the falling trendline resistance aligns.

A sustained move above the latter, EUR/USD will confirm an upside breakout from the symmetrical triangle formation.

Buyers could eye for a rally towards the 1.1400 round number.

EUR/USD: Additional levels to consider