Mohammad Quqas
Independent Analyst
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EUR/USD fail in sustains the upside trend momentum.
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The major pair broke a two-week trading range on Thursday.
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The momentum oscillator, like the Relative Strength Index, holds onto the oversold zone with no signs of corrections in the near term.
The EUR/USD edged lower today in the initial New York session. The major pair broke a two-week trading range after hitting the June high at 1.0773 yesterday. At the time of writing, EUR/USD was trading at 1.0532, down (-0.7607%) for the intraday.
Having said that, in a previous analysis, the downside potential had the upper hand for the European currency pair. However, the pair started its downside journey after it was able to break the support level of 1.0678, which was able to guard the price against falling too far.
On the 4-hour chart, the major currency pair edges lower, back to levels last seen on May 20. Furthermore, the 21-period sustained trading below the 50-period on the Moving Average (MA) indicates more downside in the not-so-distant future. On the other hand, the Relative Strength Index (RSI) holds onto the oversold zone, recording 28 on the value line as the decrease in momentum still has a vacancy.
The aforementioned formation indicates an extension of the current trend, and that will be the more likely scenario to occur. EUR/USD encounters the first hurdle around 1.0521. If a successful breach occurs at the previously mentioned hurdle, that would pave the way towards 1.0498, followed by 1.0460, which was last seen on May 18th.
Alternatively, buyers should wait for a decisive breach of the 1.0545 resistance level to validate the upside potential. The sustains above the aforementioned level would open the door towards the 1.0572 resistance level, followed by 1.0597. exploding that level will bring us back to the critical resistance level at 1.0643.
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