- EURUSD drops to a fresh 1-month low after violating SMAs
- Quickly recoups some losses and challenges 61.8% Fibo
- Oscillators suggest that bearish forces are strengthening
EURUSD has undergone some volatile sessions in the past few days, eventually dipping beneath both its 50- and 200-day simple moving averages (SMAs), to a fresh one-month low. Also, the pair broke below its descending trendline in place since December further deteriorating the technical outlook
Should the recent weakness persist, the price could challenge its one-month bottom of 1.0666. A break below that zone could pave the way for 1.0595, which is the 78.6% Fibonacci retracement of the 1.0447-1.1138 upleg. Failing to halt there, the pair could descend towards the October 2023 low of 1.0447.
Alternatively, if the price manages to surpass the 61.8% Fibo of 1.0711, initial resistance could be found at the 50.0% Fibo of 1.0793. Higher, the bulls could attack the 38.2% Fibo of 1.0874. Should that barricade also fail, attention could shift to the 23.6% Fibo of 1.0975, a region that curbed the pair’s advance in March.
In brief, EURUSD has come under some selling pressure lately, which led to a fresh one-month bottom. Moving forward, a failure to jump back above the restrictive medium-term trendline could increase the bears’ appetite for more downside.
