EURUSD came under strong selling pressure yesterday following Fed Chair Powell’s hawkish remarks, breaking back below the medium-term downtrend line drawn from the high of February 10. The pair extended its slide today, breaking a short-term upward sloping support line taken from the low of September 28. These technical signs suggest that the bears are back in the driver’s seat.
Our short-term oscillators are detecting strong downside speed, which adds more credence to that notion. The RSI is lying below 30 and still pointing down, while the MACD is running below both its zero and trigger line, pointing south as well.
The bears could challenge the 0.9700 territory soon, marked by the low of October 21, and if they prove strong enough to overcome it, they may put the 0.9630 zone on their radars. If they are not willing to quit around there either, the slide may extend towards the 20-year low of 0.9535, hit on September 28.
On the upside, a break back above the medium-term downtrend line could invite some more bulls into the action, who could get encouraged to climb towards the 0.9950 barrier, or even try another test at parity. Should they manage to breach parity as well, the door towards the high of October 27 at 1.0095 could be opened.
To recap, EURUSD has been under strong pressure since yesterday, returning below the medium-term downtrend line and breaking a short-term upward sloping support line. This suggests that the bearish bias has intensified.
