- EUR/USD consolidates recent losses around one-month low, snaps three-day downtrend.
- Four-month-old bearish channel, sustained break of six-week-old horizontal support keep sellers hopeful.
- 1.0350-40 region appears a tough nut to crack for bears amid nearly oversold RSI.
EUR/USD picks up bids to refresh intraday high around 1.0420, consolidating recent losses at monthly low, during Tuesday’s Asian session.
While nearly oversold RSI (14) might have triggered the quote’s latest rebound, it stays below the six-week-long horizontal support, now resistance around 1.0460-70, amid bearish MACD signals. Also favoring the EUR/USD sellers is a downward sloping trend channel formation since February.
That said, the corrective pullback’s upside break of the 1.0470 hurdle could also fail to recall the bulls as the 21-DMA and upper line of the stated channel, near 1.0640 and 1.0730 in that order, could test the upside momentum.
Even if the EUR/USD prices stay firmer beyond the 1.0730 resistance, May’s high of 1.0786 acts as a validation point for the pair’s additional upside.
Alternatively, the yearly low and the January 2017 bottom together highlights the 1.0350-40 as the short-term key support. The odds of a corrective pullback from the said support also take clues from the RSI conditions.
If at all the EUR/USD prices drop below 1.0340, it’s south-run towards the support line of the bearish channel, around 1.0180 by the press time, can’t be ruled out.
EUR/USD: Daily chart
Trend: Bearish
