EURUSD has lost its positive momentum after the pullback on the two-and-a-half-year high of 1.2010 on September 1, and it has been trading in an upward sloping channel over the last month.
In the short-term, the market could retain the selling interest as the RSI is holding well below its 50 neutral mark and the MACD has dropped below its zero and trigger lines. The bearish movement, though, could stay in place given that prices continue to fluctuate below the Ichimoku cloud and the short-term moving averages (SMAs) in the 4-hour chart.
Should the pair stretch south, the 200-period SMA at 1.1780, which overlaps with the lower boundary of the channel could provide immediate support before the pair touches the 1.1753 area. A significant step lower could bring the bearish sentiment back into play, sending the price probably towards 1.1695, which was a strong barrier at the beginning of August. If the sell-off extends, attention could then turn to the 1.1625 support.
On the other side, the 40-period SMA currently at 1.1872 and the 20-period SMA at 1.1900 may halt upside movements. If traders continue to buy the pair, the price could rise until the recent multi-month peak of 1.2010, while steeper increases could also touch the 1.2160 hurdle, taken from the inside swing low on February 2018.
In the medium-term picture, EURUSD has been trading bullish in the past five months but the 200-period SMA is acting as strong support for the bears.
