The EUR/USD currency pair is recently down to trade around 1.1580, heading lower for a fourth straight day. The latter, on Wednesday, saw the pair add to its weekly tumble, compounding pressure fresh weekly lows as it continues to fight for continued footing. The recent performance Euro under increasing pressure versus the US Dollar. This has created a growing sense of alarm among traders and analysts.
Over the last month or so, EUR/USD has demonstrated a pronounced tendency to bounce hard from 1.1540. This level has now flipped to be the pivotal support line. The way that we are trading now makes it look like that support will be retested before long. The pair is making a bearish move as it forms below all its moving averages. The 20 Simple Moving Average (SMA) is proving rather powerful, especially considering it’s located below the longer-term SMAs in the 1.1650 area.
Despite oversold technical indicators, EUR/USD is losing its downward momentum as price hunts for the 1.1540 support area, according to technical indicators. Even so, we don’t see any signs of downward exhaustion, meaning the pair could still have plenty more to slide. Industry analysts largely predict the drop to persist. If it does, EUR/USD could sell-off more aggressively and test the long-term dynamic support region around 1.1470.
The danger to EUR/USD has been obvious all week, as the pressure to crash its support has been tangible at all times. The pair’s performance only gets worse as it trades below both the 20 and 100 SMAs. This serves as a reminder of the overwhelming bearish sentiment which continues to rule trading days. As you can see, the shorter SMA is about to cross below the longer one. Even more troubling, this crossover foreshadows deeper losses to come.
Analysts are watching closely, with the EUR/USD approaching its October base near the 1.1540 support region. Such a close proximity increases the bearish potential, as it begs the question of how the bears will act if this support level is lost. The market remains vigilant as developments unfold.