EUR/USD Price Analysis: Remains vulnerable to test 2021 low post-Fed
|- EUR/USD holds lower ground after Fed directed bears to five-week low.
- Bearish MACD signals, clear downside break of two-month-old ascending trend line and sustained trading below 20-DMA favor bears.
- Buyers remain cautious until refreshing the 2022 peak, 61.8% FE will challenge bears past 1.1185.
EUR/USD stays pressured around a multi-day low near 1.1240 after the Fed showdown.
That said, the major currency pair dropped the most in over a week while breaking a two-week-old ascending trend line post-Fed, staying below the support-turned-resistance line of 1.1295 by the press time of the initial Asian session on Thursday.
In addition to the downside break of the previously important support line, bearish MACD signals and downbeat RSI line, not oversold, also favor EUR/USD bears to aim for the year 2021 bottom surrounding 1.1185.
However, a horizontal area comprising multiple lows marked since November, near 1.1230, tests the immediate downside of the pair.
It should be noted that the quote’s weakness past 1.1185 will be challenged by the RSI line, which is declining towards the oversold territory. Also likely to test the EUR/USD sellers is the 61.8% Fibonacci Expansion (FE) of the pair’s moves from late September 2021 to the January 2022 swing high, near 1.1120.
Alternatively, a corrective pullback may initially aim for the previous support line, near 1.1295, before directing EUR/USD bulls towards the 20-DMA level of 1.1340.
If the pair buyers manage to cross the 1.1340 mark, a horizontal resistance from November 16, near 1.1385-90, will probe the quote’s upside towards the monthly high, also the yearly peak, of 1.1482.
EUR/USD: Daily chart
Trend: Further weakness expected
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