Technical Analysis – EURUSD tumbles to new 5-month low; could weaken further in short-term

EURUSD has come under renewed selling pressure over the last five trading days, slipping below the 1.1820 key level. The price remains under pressure and risk is still to the downside as prices continue to drift lower, hitting a new 5-month low of 1.1739. The short-term technical indicators are bearish, pointing to more weakness in the market.

Having a look at the daily timeframe, the single currency is developing well below the 20- and 40-simple moving averages (SMAs) versus the greenback. The RSI indicator declined below the 30 level, signaling further losses, while the MACD oscillator fell below the trigger line and is strengthening its negative momentum.

Immediate support is being provided by the 38.2% Fibonacci retracement level around 1.1720 of the upleg from 1.0340 to 1.2554. Moreover, should prices dip lower again, the next support would likely come from the 1.1550 barrier, taken from the low on November 2017.

In case of an upward attempt, EURUSD would likely meet resistance at the 1.1820 barrier. A break above this level, would ease the downside pressure, and touch the 20-day SMA around 1.1950. Further gains could drive the pair towards the 23.6% Fibonacci mark of 1.2030 and would help turn the short-term bias to a slightly positive one.

In the medium-term, the bullish outlook turned to bearish as the price dropped below the significant 1.2160 hurdle, which was acting as strong support of the trading range 1.2160 – 1.2540. Also, the price completed the fifth straight negative week.