EUR/USD traded on Friday, after hitting resistance on Thursday slightly above the downside resistance line taken from the high of February 10th. The slide found support near the round number of 1.1000, and then, the rate moved sideways, but stayed below the aforementioned downside line. In our view, this keeps the short-term outlook somewhat negative.
That said, in order to get confident on another round of selling, we would like to see a clear dip below the 1.1000 barrier. This may initially encourage the bears to push towards the 1.0925 barrier, marked by the low of March 15th, or the 1.0900 hurdle, marked by the low of the day before. If neither barrier is able to stop the slide, then a break lower could pave the way towards the low of March 7th, at around 1.0807.
Shifting attention to our short-term oscillators, we see that the RSI lies slightly above 50 and looks ready to slide below it, while the MACD, although slightly positive, runs below its trigger line, showing signs that it could turn negative. Both indicators suggest that the pair may start gaining downside speed again soon, and add more credence to the view that some further declines could be looming.
On the upside, we would like to see a strong break above 1.1145, the high of March 2nd, before we start examining whether the outlook has turned overly positive. This could confirm the break above the downside resistance line drawn from the peak of February 10th, and may see scope for advances towards the 1.1235 zone, defined as a resistance by the peak of March 1st. Slightly higher lies the 1.290 zone, which acted as a strong support on February 14th and 22nd, the break of which could set the stage for extensions towards the 13.65 hurdle, or the 1.1395 obstacle, marked by the peaks of February 23rd and 16th, respectively.
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