- EUR/USD remains heavy around the lowest levels in 14 months.
- 200-week SMA, 2019 yearly peak challenge the bears.
- 100-week SMA, previous support from April guard recovery moves.
EUR/USD flirts with 1.1600, holding lower ground near the yearly low amid Thursday’s Asian session.
The major currency pair dropped to the multi-day low after breaking the 1.1600 threshold the previous day. However, the bears have another test to pass to keep the reins going forward.
Among them, an area comprising 200-week SMA and January 2019 high around 1.1570 becomes crucial support as RSI inches closer to the oversold region.
Following that, 50% Fibonacci retracement (Fibo.) of March 2020 to January 2021 upside and early 2020 high, close to 1.1495, will gain the market’s attention.
Meanwhile, the corrective pullback will have to stay beyond the 100-week SMA level surrounding 1.1600, also ignore bearish MACD, to aim for the support-turned-resistance line from April near 1.1650.
Should the quote rise past 1.1650, the 38.2% Fibo. near 1.1700 will provide an additional challenge to the EUR/USD bulls before giving them the throne.
Overall, EUR/USD bears have tough questions to answer and hence odds of a bounce can’t be ruled out. However, the trend change isn’t on the table.
EUR/USD: Weekly chart
Trend: Corrective pullback expected