EUR/USD Price Analysis: Two-month-old support tests bears on the way to 0.9800
- EUR/USD prints three-day downtrend around the lowest levels in 19 years.
- MACD, RSI suggests limited downside room, highlighting the descending support line from July.
- 61.8% Fibonacci Expansion (FE) lures sellers, nearby SMAs test the bulls.
EUR/USD remains on the back foot as bears approach a two-month-long support line, near 0.9890 by the press time of Wednesday’s Asian session. In doing so, the major currency pair remains near the 19-year low marked the previous day.
That said, the quote’s repeated failures to cross the 50-SMA and the 100-SMA joins bearish MACD signals and downbeat RSI (14) not oversold, to favor the EUR/USD bears.
It’s worth noting, however, that the RSI line is near the oversold territory and hence the stated support trend line could trigger the pair’s bounce from the 0.9875 level.
Even so, the 50-SMA and the 100-SMA, respectively near 0.9975 and 1.0010, could restrict the short-term EUR/USD rebound.
Following that, a six-week-old horizontal resistance area near 1.0085-1.0100 will be important to watch as it appears the last defense of the bears.
On the contrary, a downside break of the 0.9875 support line could quickly drag the pair towards the 61.8% Fibonacci Expansion (FE) of the EUR/USD’s August 10-26 moves, close to 0.9800.
It should be noted that the latest trough and the December 2002 bottom, close to 0.9865-60, appear an important intermediate challenge for the bears to consider.
EUR/USD: Four-hour chart
Trend: Limited downside 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.
