EURUSD has been outperforming in the past three days, after the strong rebound on the 21-month low of 1.1175 on March 7. Currently, the price has been developing within a downward sloping channel in the short-term following the penetration of the medium-term sideways channel. Technically, the RSI indicator is confirming the recent upside movement, while the stochastics posted a bullish crossover within %K and %D lines in the oversold zone, suggesting a positive correction.
If the price continues the pullback on the 21-month trough, immediate minor resistance is coming from the 1.1270 barrier, which was touched earlier in the morning again. A break above this level, could send prices towards the 20-day simple moving average (SMA) currently at 1.1310 before moving until the 23.6% Fibonacci retracement level of the downleg from 1.1815 to 1.1175, near 1.1325. Slightly above this hurdle, the price may hit the 40-SMA, which stands around 1.1340 and then could move towards the descending trend line near 1.1370.
On the other hand, if the price fails to jump above 1.1270, it could hit the 1.1175 bottom again and a violation of this obstacle could push the pair even lower, below the channel, challenging 1.1115, identified by the lows on June 2017. More downside pressures could open the door for the 1.0830 level, taken from the low on May 2017.
Summarizing, EURUSD has posted an aggressive bearish rally in the preceding week, switching the neutral outlook to negative, creating lower lows and lower highs in the near term.
