EUR/USD Price Analysis: Bear flag remains in play around 1.0550
- EUR/USD holds onto the one-week-old bearish consolidation below six-week-long resistance line.
- Steady RSI sustained trading below 100-SMA adds strength to the downside bias.
- Clear break of 1.0490 acts as a trigger for notable declines, 1.0650 may lure intraday buyers.
EUR/USD remains sidelined at around 1.0550, keeping the weekly bear flag intact during Tuesday’s initial Asian session.
Unlike other major currency pairs that lost heavily against the US dollar in the recent risk-off play, the EUR/USD stayed inside a one-week-old rising trend channel after dropping over 450 pips during late April. In doing so, the quote portrays a bear flag chart pattern suggesting the further downside.
Other than the bearish formation, steady RSI and sustained trading below the key resistances, namely 100-SMA and a downward sloping trend line from March 31, keep EUR/USD bears hopeful.
However, a clear downside break of the flag’s support, around 1.0490 by the press time, becomes necessary for the show of south-run targeting the theoretical point around 1.0000. During the fall, lows marked in 2017 near 1.0340 may act as a buffer.
Alternatively, recovery moves may initially aim for the confluence of the stated flag and the 100-SMA, around 1.0650.
Following that, the aforementioned resistance line from March 31, close to 1.0730, will be in focus.
EUR/USD: Four-hour chart
Trend: Further weakness 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.
