In addition to posting the fourth consecutive weekly losses, the EURUSD also ended the week on a negative note while piercing a 10-week-old rising support line, now immediate resistance around 1.0950. Also keeping the Euro sellers hopeful are the bearish MACD signals. However, the RSI (14) line is below 50.0 and suggests bottom-picking, which in turn highlights the monthly low of around 1.0910 as short-term key support. Following that, July’s bottom surrounding 1.0830 and the 78.6% Fibonacci retracement of May-July upside, near 1.0770, can check the downside moves targeting May’s trough close to 1.0635.
Meanwhile, a corrective bounce needs to cross a convergence of the 100-SMA and the 200-SMA to convince the intraday buyers of the EURUSD pair. Even so, a fortnight-old horizontal resistance area surrounding 1.1045-50 could test the bulls before giving them control. Even so, the tops marked during late July may offer breathing space to the buyers near 1.1150. In a case where the Euro pair remains firmer past 1.1150, the odds of witnessing a run-up towards challenging the yearly top marked in July around 1.1275 can’t be ruled out.
Overall, EURUSD is on the bear’s radar as traders await more details of EU/US growth and inflation.
