EUR/USD Price Analysis: Decline below 61.8% Fibo at around 1.0000 secures a contra bet
|- Downside momentum loss on the broader picture still favors the domination of Eurozone bulls.
- The asset has slipped below the 61.8% Fibo retracement at 0.9994.
- Auction below 20-EMA adds to the downside filters.
The EUR/USD pair has dropped to near Wednesday’s low around 0.9969 in the Asian session. The asset has picked offers after a downside break of the consolidation formed in a narrow range of 0.9980-0.9984.
On a four-hour scale, the asset witnessed a strong rebound after displaying downside momentum loss at around September 6 low of 0.9864. The momentum oscillator, Relative Strength Index (RSI) (14) made a higher low while the asset displayed a lower low.
A recovery in the asset was followed by a sheer retracement, which has dragged the asset below 61.8% Fibo area. The marking of the retracement tool from September 6 low at 0.9864 to Monday’s high at 1.0198 displayed the placement of 61.8% Fibo retracement at 0.9994.
The asset has dropped below the 20-period Exponential Moving Average (EMA) at 1.0022, which adds to the downside filters.
Investors should be aware of the fact that retracement has been observed after a Bullish Divergence. A few times retracement gets more steeped due to sour market sentiment. However, the smart money structure is indicating a buy signal above the 20-EMA, which will send the pair towards a 38.2% retracement at 1.0070, followed by Monday’s high at 1.0198.
On the flip side, a break below Wednesday’s low at 0.9955 will drag the asset towards the round-level support of 0.9900, followed by a 19-year low at 0.9864.
EUR/USD four-hour chart
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.