EUR/USD weakens sharply after key support finally gives way

Key highlights

• EUR/USD started a sharp decline below the 1.1700 zone.
• It traded below a rising channel with support at 1.1720 on the 4-hour chart.

EUR/USD technical analysis

Looking at the 4-hour chart, the pair traded below a rising channel with support at 1.1720. The bears pushed the pair below 1.1620. A low was formed at 1.1602, and the pair is now consolidating losses well below the 23.6% Fib retracement level of the downward move from the 1.1787 swing high to the 1.1602 low.

It is also well below the 100 simple moving average (red, 4-hour) and the 200 simple moving average (green, 4-hour). On the upside, the pair faces resistance at 1.1650.

The first major resistance sits at 1.1700, the 200 simple moving average (green, 4-hour), and the 50% Fib retracement level of the downward move from the 1.1787 swing high to the 1.1602 low. A close above 1.1700 could open doors for gains above 1.1720 and the 100 simple moving average (red, 4-hour).

In the stated case, the bulls could aim for a move to 1.1800. If there is another decline, the pair could find bids near 1.1600. The first major support sits near the 1.1550 level.

The next support could be 1.1520. A close below 1.1520 might initiate a drop to 1.1450. Any more losses might open the doors for a drop toward the 1.1400 zone.