EUR-USD pair showin strong downward trend but the RSI has an important signal

The EUR-USD pair is firmly trading below the downward trend line (showin in orange) on a 4-hour time frame. The pace of drop and the angle of the current trend is particularly interesting. It shows that the bears are in full control of the price. The price tried to break above the downward trend but it failed miserably. The round circle on the char shows this point. Moreover, the price is also trading below the 50 and 100-day moving averages (50day shown in yellow and 100-day shown in green) which further confirms the above argument that the bears are in full control of the price.

Having said this, it is important to pay attention to what the Balance of the Power and the Relative Strength index are showing. Both of them have one element in common, the price is way oversold and this could attract some buyers. A level below 30 for the RSI index represents an oversold zone and a level above 70 shows over zone. There is a trend line on the balance of power, if the BOP breaks this trend line, it will be confirmation that the bears are picking up further momentum

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The support line is shown in light green colour and the support is at 1.1435 and the resistance line is shown in red and it is at 1.1789


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