EUR/USD Analysis: oversold, yet poised to extend its slide

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1126

US Durable Goods Orders surprised to the upside in March.
EUR/USD trading at its lowest in almost two years.

European currencies are the ones suffering the most from broad dollar's strength, with the EUR/USD pair trading at its lowest in almost two years during the London session, down to the 1.1120 price zone. There was no particular catalyst behind the latest decline, but a follow-through of Wednesday moves. The macroeconomic calendar didn't offer relevant EU data, but the US has just released March Durable Goods Orders. According to the official report, Orders were up by 2.7% MoM, much better than the 0.8% advance expected. The Nondefense Capital Goods Orders ex Aircraft rose by 1.3% vs. the market's forecast of 0.1%. Alongside, the US released unemployment claims, which increased to 230K in the week ended April 19. The strong numbers kept the greenback at its recent highs, although there were no fireworks as the greenback is largely overbought.

The EUR/USD pair is trading a couple of pips above its daily low of 1.1117, its lowest since May 2017, and extremely oversold in intraday time frames. In the 4 hours chart, however, technical indicators maintain their strong downward slopes, with the RSI currently at around 19, indicating that sellers are not ready to give up. In the mentioned chart, the 20 SMA gains downward traction below the larger ones, currently at around 1.1205. The pair can correct up to this last with the correct catalyst, but bears will retain control and will be likely adding shorts at higher levels.

Support levels: 1.1115 1.1085 1.1050

Resistance levels: 1.1145 1.1190 1.1220

View Live chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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