EUR/USD Price Analysis: Retreats inside weekly bullish channel, 0.9890 back in focus

  • EUR/USD struggles to defend the previous day’s recovery inside ascending trend channel.
  • Convergence of previous resistance line, channel’s bottom appears a tough nut to crack for bears.
  • RSI retreat adds strength to pullback moves, 200-SMA acts as additional upside filter.

EUR/USD eases back to the 1.0000 parity level, after bouncing off a one-week high, as traders struggle for clear directions during Tuesday’s Asian session.

In doing so, the major currency pair retreats from the resistance line of a one-week-old ascending trend channel. The pullback moves also take clues from the RSI (14) retreat and hence hint at the further weakness.

However, a confluence of the resistance-turned-support line from August 11 and the lower line of the stated channel, around 0.9890, seems a strong support for the EUR/USD bears to crack to retake control.

Following that, lows marked during September and October 2002, respectively near 0.9685 and 0.9610, could lure the pair sellers.

Meanwhile, recovery moves may initially aim for the upper line of the bullish channel, close to 1.0030 at the latest. Following that, the three-week-old horizontal resistance near 1.0120 and the 200-SMA level of 1.0150 could test the upside momentum.

It’s worth noting, though, that the EUR/USD advances past 1.0150 could enable buyers to aim for the monthly peak surrounding 1.0365.

EUR/USD: Four-hour chart

Trend: Pullback expected

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