EUR/USD tumbles within descending channel; 23-month low in sight
|Since its deep fall towards a two-week low in early May, EURUSD slipped beneath the 20- and 40-simple moving averages (SMAs) in the daily timeframe, remaining in a descending channel of its drop from 1.1570. The technical picture supports that the 1.1260 resistance is likely to continue to hold in the short-term.
Looking at momentum indicators, the MACD declined below its trigger and zero lines, suggesting that the market could keep losing momentum in the near term. The stochastic also supports this view in the oversold territory.
If prices continue to head lower, support should come from the 23-month low of 1.1110. A drop below this level would reinforce the medium-term bearish view and open the way towards the return line of the downward sloping channel around the 1.1000 handle, before resting the 1.0900 support, registered on March 2017.
However, should an upside reversal take form, immediate resistance would likely come from the 20- and 40-SMAs currently at 1.1190 and 1.1220 correspondingly. Even higher, the 1.1260 resistance and the 23.6% Fibonacci retracement level of the downleg from 1.1815 to 1.1110 near 1.1275 could attract traders’ attention.
In brief, EURUSD is heading sharply lower over the last five days in the descending channel, suggesting more losses in the short-term.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.