EUR/USD Price Analysis: 20-DMA probes bounce from two-month-old support line
- EUR/USD struggles to extend corrective pullback from the key support.
- Bearish MACD signals suggest further downside, 50-DMA acts as immediate support.
- Bulls need a clear break of 61.8% Fibonacci retracement for confirmation.
EUR/USD remains pressured below 20-DMA, around 1.1340 amid Monday’s initial Asian session, following the biggest weekly fall in five.
In addition to the major currency pair’s failures to cross the short-term key moving average, bearish MACD signals also suggest the bear’s firm determination to break an upward sloping trend line from late November, which has been defending buyers of late.
Ahead of the stated key support line, near 1.1300 by the press time, the 50-DMA level of 1.1315 will test the EUR/USD sellers.
Also acting as a downside filter is the 23.6% Fibonacci retracement (Fibo.) level of October-November 2021 downside, near 1.1300, a break of which will direct the quote towards 2021 bottom of 1.1186 with 1.1230 likely acting as a buffer.
Meanwhile, a clear upside break of the 20-DMA level surrounding 1.1350 won’t be a green signal for the EUR/USD bulls as 50% Fibo. and the monthly high, respectively around 1.1435 and 1.1480, will challenge the pair’s recovery.
Even if the pair rises past 1.1480, the 61.8% Fibonacci retracement level of 1.1500 will be a crucial resistance for the pair traders to watch.
To sum up, the EUR/USD prices are at a critical support juncture as traders await the Fed verdict.
EUR/USD: Daily chart
Trend: Further declines expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
