EURUSD lost momentum after speeding up to the six-week high of 1.0092 in the four-hour chart.
According to the RSI and the stochastics, the pair has reached overbought levels, making a downside correction possible ahead of the ECB policy announcement.
Yet, sellers may not take a lead if the support around the 78.6% Fibonacci retracement of the 1.0197-0.9535 downleg stands firm at 1.0054. In this case, the price could pivot northwards with scope to test September’s high of 1.0197. A decisive close above the 1.0255 bar could be the next challenge.
Should sellers press the price below 1.0054, all eyes will turn back to parity and the 61.8% Fibonacci. A step below the 20-period exponential moving average (EMA) could revisit the key constraining zone formed between the 0.9943 handle and the broken descending trendline. If downside pressures intensify, the pair could depreciate towards the 50% Fibonacci of 0.9860 and the 2018 constraining line seen near 0.9840.
In short, EURUSD is at risk of a downside correction after peaking slightly above parity, with traders waiting for a bearish confirmation below 1.0054.
