EUR/USD fell sharply on Friday, breaking below the 1.1025 level, which is near the low of August 1st, and then below the psychological round figure of 1.1000. The slide was stopped at around 1.0965 and then the rate rebounded somewhat. That said, during the Asian morning today, the bears regained control and at the time of writing, they appear ready to push the battle decisively below 1.0965.
If they succeed in doing so, we could see them aiming for the low of May 15th, 2017, at around 1.0915. If that zone is not able to stop the slide either, then its break may carry more bearish implications, perhaps setting the stage for the 1.0835 territory, defined by the lows of April 24th and May 11th, 2017.
Taking a look at our short-term oscillators, we see that the RSI stands below its 30 line and points down, while the MACD lies below both its zero and trigger lines, pointing down as well. Both indicators detect strong downside speed and corroborate the case for deeper declines.
On the upside, we would like to see a clear recovery above 1.1025, before we start examining whether the bears have decided to take a break, and thereby allow EUR/USD to correct higher. Such a move could bring the rate back near Friday’s high of 1.1050, the break of which may encourage buyers to put the 1.1090 hurdle on their radars, which is slightly below Thursday’s peak.
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