HomeContributorsTechnical AnalysisEURUSD Pokes at 2-Year Base, Bias Remains Bearish

EURUSD Pokes at 2-Year Base, Bias Remains Bearish

EURUSD is taunting the 1.0726-1.0774 key support border after recently taking a fresh jab at it. The descending simple moving averages (SMAs) are defending the near 11-month downtrend from the 1.2266 high.

Furthermore, the Ichimoku lines are indicating a pause in downward forces, while the short-term oscillators are suggesting a commanding negative bearing in the pair. The MACD has remained beneath its red trigger line, while the RSI is sliding towards the 30 oversold mark, both sponsoring more negative momentum in the pair. Additionally, the renewed negative charge in the stochastic oscillator, is hinting that sellers are sustaining downward pressure in the pair.

In the negative scenario, downward friction could commence from the critical 1.0726-1.0774 support foundation that extends back to the lows over the early part of April until mid-May 2020 period. If this crucial barricade fails to suppress negative tendencies from gathering speed, the March 2020 low of 1.0635 could draw traders’ attention. From here, unsuccessful attempts from buyers to find their feet at this 35-month trough could steer the pair to test the April 2017 low of 1.0569 ahead of the February 2017 trough of 1.0493.

However, if the price bounces off the 1.0726-1.0774 floor, upside constraints could originate at the red Tenkan-sen line at 1.0842 ahead of the 1.0900-1.0960 resistance barrier, which is capped by the blue Kijun-sen line. Recouping more of the previously lost ground, the pair may then encounter a tough resistance region between the falling 50-day SMA at 1.1057 until the Ichimoku cloud’s upper band at 1.1148. In the event profound buying pressures endure above the cloud and push over the nearby 100-day SMA at 1.1190, the bulls could then seek out the 1.1279 barrier before eyeing the 200-day SMA, which is nearing the 1.1400 price vicinity.

Summarizing, EURUSD is sustaining a bearish bias below the SMAs and the 1.1184 high. A dive in the price below the 1.0726-1.0774 base could significantly hurt positive prospects in the pair. That said, for a clearer optimistic outlook to return, the price would need to pilot beyond the 1.1500-1.1553 obstacle.

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