EUR/USD has been trading in a consolidative manner since Thursday, when the pair hit resistance fractionally below the psychological zone of 1.1000. That said, it also remained supported by the 1.0960 area and the 50-EMA on the 4-hour chart. Overall, the rate continues to trade below the downside resistance line drawn from the high of June 25th, and thus, we would hold a cautiously-bearish approach for now.
If the bears are strong enough to push the rate below the 1.0960 level, we could then see them aiming for Thursday’s low of 1.0940. Another break, below 1.0940, could carry larger bearish implications, perhaps setting the stage for the 1.0905 level, the break of which could extend the slide towards the 1.0880 zone, near the low of October 1st, which is also the lowest point since May 2017.
Taking a look at our short-term oscillators, we see that the RSI, although above 50, has turned down and looks able to fall below that equilibrium barrier soon. The MACD also lies within its bullish territory, but has topped and fallen below its trigger line. Both indicators suggest that the rate may have run out of upside momentum and support somewhat the notion for some short-term upcoming declines.
On the upside, we would like to see a strong break above 1.1025 before we start examining whether the bulls have gained full control. Such a move would also bring the pair above the aforementioned downside line, as well as above the 200-EMA. We could then see advances towards the 1.1070 zone, which provided decent resistance between September 17th and 20th, or the 1.1085 level, which is near the high of September 16th.
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