- The exploding of the Darvas Box chart formation will imbalance the asset.
- Declining 20- and 50-period EMAs claim that the downside is intact.
- The RSI (14) is on the verge of slipping below 40.00.
The EUR/USD pair is experiencing an open-rejection reverse trading session on Monday. The asset opened almost flat at 1.0806 and moved higher to 1.0815, but responsive sellers dragged the pair below the opening price to a low of 1.0772. The pair has been trading lower for the past few trading sessions after failing to sustain above the psychological resistance of 1.0900 last week.
On a four-hour scale, the asset forms a Darvas Box chart pattern, plotted in a range of 1.0763-1.0940. Validation of the Darvas Box chart pattern will result in an expansion of volume and volatility.
The 20- and 50-period Exponential Moving Averages (EMAs) at 1.0812 and 1.0832, respectively, continue to scale lower, which signals that a bearish bias is intact.
Meanwhile, the Relative Strength Index (RSI) (14) is on the verge of slipping below 40.00, which will bring a fresh bearish impulsive wave.
A slippage below monthly lows at 1.0758 will drag the asset towards the 24 March 2020 low at 1.0721, followed by a two-year low at 1.0639.
On the contrary, the euro bulls can dictate the asset if it exceeds the 150-EMA at 1.0908. This will send the asset towards the March 22 and March 31 highs at 1.1046 and 1.1185, respectively.
EUR/USD four-hour chart
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