Technical Analysis: EURUSD has more downside room amid pre-Fed USD strength
EURUSD dribbles around a monthly low after breaking the six-week-old horizontal support. That said, the downward sloping RSI (14) line, not oversold, joins bearish MACD signals to also hint at the major currency pair’s further downside. With this, the sellers brace for the yearly low surrounding 1.0350. However, the RSI line and nearness to the Fed may restrict the quote’s downside below the same, if not then the 61.8% Fibonacci Expansion (FE) of late March-May moves, around 1.0270, will gain the market’s attention.
On the contrary, corrective pullback needs to sustain beyond the immediate support-turned-resistance, around 1.0460-70, to convince short-term EURUSD buyers. Following that, the 20-DMA level near 1.0650 will precede the monthly top of 1.0773 to challenge the pair’s further upside. It’s worth noting that May’s top near 1.0790 acts as a validation point for the quote’s run-up towards late April swing high near 1.0935.
Overall, broad US dollar strength ahead of the Fed’s widely anticipated rate hike keeps EURUSD pressured towards refreshing the yearly low marked in May.