EURUSD dropped the most in three weeks on Tuesday after a downside break of an ascending trend line from mid-November and the 50-SMA. Adding strength to the downside bias are the bearish MACD signals. However, the nearly oversold RSI (14) line joins the 100-SMA support of 1.0935 to restrict short-term declines of the Euro pair. Even if the pair slides beneath 1.0935, the bottom line of a two-month-long bullish channel, close to 1.0840 at the latest, acts as the last defense of the pair buyers. Following that, the bears will be able to aim for the previous monthly low surrounding 1.0725.
Meanwhile, the EURUSD pair’s recovery hinges on the quote’s ability to stay beyond the 1.1020-25 resistance confluence comprising the 50-SMA and previous support line stretched from December 18. In a case where the Euro bulls keep the reins past 1.1025, the previous monthly high near 1.1140 and the aforementioned channel’s top line, around 1.1160 by the press time, will gain the market’s attention ahead of the year 2023 peak surrounding 1.1275.
Overall, the EURUSD pair is likely to recover unless the Fed Minutes bolster the US Dollar strength, which is least expected. It’s worth noting, however, that the upside room appears limited.