EURUSD recently broke past the 1.1900 key resistance level then zoomed up to the 1.2180 area before pausing from its climb. Price could be in for a correction to the support areas marked by the Fibonacci retracement tool.

The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that support levels are more likely to hold than to break. The gap between the moving averages is widening to reflect strengthening bullish momentum.

The 38.2% Fib is the closest support area and is near the 1.1950 minor psychological level. The 50% Fib is close to the 100 SMA dynamic inflection point while the 200 SMA is near the 61.8% Fib at 1.1820.

Stochastic is turning lower after recently reaching the overbought zone, indicating that sellers are taking over while buyers take a break. RSI is also pointing down, so price could follow suit as the oscillator moves south.

EURUSD could be in for a lot of volatility this week as the ECB is gearing up to make its monetary policy announcement. No actual interest rate changes are expected, but the central bank might announce an expansion and extension of its PEPP.

A longer extension and larger increase could be bullish for the shared currency as the eurozone economy could use a boost following several lockdowns in major European cities. A smaller increase in stimulus, on the other hand, could spur declines for the shared currency.

There are no major reports due from the US economy other than the CPI and PPI readings due much later on. Risk appetite would likely be a key driver of price action, with risk-on flows favoring the euro more than the US currency. Expectations of stimulus from the US government could also bring in some dollar volatility.