EUR/USD traded lower today, after it hit resistance near the 1.0770 zone during the Asian day. Overall, the pair continues to trade below the downside resistance line drawn from the high of March 9th, but in order to get confident on more bearish extensions, we would like to see a decisive dip below Friday’s low, at around 1.0635.
Such a move would confirm a forthcoming lower low and may initially pave the way towards the 1.0570 territory, marked as a support by the low of April 10th, 2017. In case that area is broken as well, then we may see the bears targeting the psychological hurdle of 1.0500, which provided strong support back in February 22nd, as well as on March 2nd and 3rd, 2017. If that zone is not able to halt the slide either, then the slide may get extended towards the low of January 11th, 2017, at around 1.0455.
Taking a look at our short-term oscillators, we see that the RSI rebounded from near its 30 line, but has turned down again, while the MACD, although above its trigger line, lies within its negative territory and shows signs of turning south as well. These indicators suggest that EUR/USD may have started regaining downside speed, which supports the case for some further near-term declines.
On the upside, we would like to see a strong recovery back above 1.0980 before we start examining whether the bears have dropped their swords. The rate would be already above the pre-mentioned downside resistance line and may allow the bulls to target the 1.1050 area, which is fractionally above the peak of March 18th, and slightly below the inside swing lows of March 12th and 13th. Another break, above 1.1050, could carry larger bullish implications, perhaps paving the way towards the peak of March 17th, at around 1.1190.
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