EURUSD has retraced half of the upleg from 1.0951 to 1.1365 (July 22 low to August 18 high). Prices have found support at the 50% Fibonacci level of this uptrend, which lies at 1.1158.
Near term bias remains on the downside and this is highlighted by the fact that RSI has been trending down and has now dipped below 50 to enter bearish territory.
EURUSD has scope to fall deeper towards 1.1108, the 61.8 Fibonacci level. Below this support level, the August 5 low comes into view at 1.1045 before the market could retest the 1.0951 low. A deeper fall would indicate that a top is now in place at 1.1365. Looking at the bigger picture, a downtrend is in progress from 1.1615 (May 3 high).
To the upside, immediate resistance lies at 1.1206, which is the August 29 high and the 38.2 Fibonacci level. The 100-day moving average also lies around this area and is capping prices.
The market remains heavy below the 100-day moving average and only a move above it and above 1.1267 (23.6 Fibonacci) would weaken the bearish bias.
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