Technical Bias: Bearish
Key Takeaways
- Euro crushed and looks set for more losses in the near term against the US dollar.
- 1.3020 is a monster support on the downside and buyers might appear if the EURUSD pair reaches there.
- EURUSD support seen at 1.3020 and resistance ahead at 1.3350.
The Euro continued to struggle against the US dollar as hawkish FOMC meeting minutes ignited a sharp downside interest in the EURUSD pair which might take it towards the 1.3020 level.
Technical Analysis
There is monster support around the 1.3020 level for the EURUSD pair, which represents a major confluence area. There is an important bullish trend line on the weekly timeframe, which also coincides with the 50% Fibonacci retracement level of the last leg higher from the 1.2042 low to 1.3995 high. Currently, the pair is trading around the 38.2% fib level, but the Euro sellers look like unstoppable at the moment, which could take the pair towards the mentioned confluence area. One key thing that supports this view is the fact that the pair is trading below all three key simple moving averages (200, 100, and 50) on the weekly timeframe. So, there is a chance that the pair might drop further and challenge the 1.3020 support area.
On the other hand, one bullish sign to note from the charts is that the weekly RSI is around the extreme levels, and in most cases the Euro has bounced sharply whenever this has happened. On the upside, initial resistance can be seen around the 100 weekly SMA, which is currently around the 1.3350 level, followed by the 200 weekly SMA.
Moving Ahead
Overall, as long as the pair is trading below the 1.3350 level, there is a high probability that the EURUSD pair might test the 1.3020 support area in the near term.
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