The EUR/USD currency pair has recently faced strong selling pressure, currently trading around a new three-month low of 1.1480. US Dollar (USD) – Blazing Bullish Strength This has led it to be stronger than the Euro as investors flee to safety.
During the most recent market session, EUR/USD is now sitting just over 1.1482. This marks a loss of close to 31 pips on the day. Analysts have noted how the pair’s momentum has hollowed out, suggesting more declines may be in store. The technical indicators point to an increasingly bearish outlook. The 20 Simple Moving Average (SMA) is declining and now below the horizontal 100 SMA at 1.1665.
The 20 SMA now resides as dynamic resistance at 1.1604 for EUR/USD. At the same time, 100 SMA shows bearish bias, having recently crossed below the shorter SMA at 1.1611. The 200 SMA is still sloping down at 1.1656, adding further bearish pressure to this pair. Resistance levels are layered between 1.1535 and 1.1656, indicating that any recovery efforts may encounter stiff resistance.
The RSI for EUR/USD has too dropped to 32.7 and is nearing oversold levels. A weakening RSI indicates that bullish momentum is faltering, strengthening the developing bearish trend. As of last week, the indicator was below 29, pointing to a continuing erosion of the Euro vis-a-vis the Dollar.
Market participants will continue watching these developments as the risk for EUR/USD skews decidedly to the downside. The confluence of technical indicators and market dynamics creates a TBD environment for Euro bulls. The persistent strength of the USD, bolstered by favorable economic data from the United States, further complicates the outlook for EUR/USD.
As the two friends journey further through this unpredictable terrain, investors watch closely for any indication of a turnaround. Increasingly, the technical setup and the market sentiment are pointing towards further downside in EUR/USD. Traders should prepare for more downside in the meantime.