EURUSD dropped to the lowest since late 2002 during the four-day downtrend. The oversold RSI, however, tested the bears afterward around 0.9900. It’s worth noting that the consolidation remains elusive until the quote stays beyond the previous monthly low near 0.9950. Even so, the parity level and a six-week-old horizontal resistance area around 1.0090 could challenge the upside momentum before directing the buyers towards the 1.0255-60 resistance confluence including the 50-DMA and upper line of the bearish channel established on May 12.
Alternatively, the 61.8% Fibonacci Expansion (FE) of late May to early August downside, close to 0.9850, appears immediate support to watch during the EURUSD pair’s further weakness. It’s worth noting, however, that a joint of the 78.6% FE and lower line of the aforementioned channel, near 0.9700 at the latest, appears a tough nut to crack for the bears afterward. In a case where the quote remains weak past 0.9710, lows marked during late 2002 and a high of early 2001, between 0.9610 and 0.9590, will be in focus.
Overall, EURUSD remains on the bear’s radar but 0.9700 becomes strong support as traders await the key US data/events.