In the same daily chart, 20 SMA converges with the mentioned Fibonacci level, reinforcing the strength of the resistance, and turning it into a critical breakout point for current bearish trend, as if price manages to reach it yet retraces, risk will remain to the downside, with fresh lows anticipating a test of the critical support area at 1.2740, where the pair presents multiple highs and lows in bigger time frames.
A steady recovery above 1.3120 on the other hand may see a stronger upward corrective movement, pointing then to a test of the 1.3300 area, 38.2% retracement of the same bearish rally. But from a fundamental side, there is little support for such a strong recovery; dollar strength is quite undeniable considering the greenback stands at multi-months highs against JPY, AUD and CAD.
Anyway, if fundamentals align with the dominant bearish trend, the EUR/USD will remain condemned despite extreme technical readings, with a weekly close below mentioned 1.2740 level exposing the pair to a test of 1.25 price zone.
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