Technical Analysis – EURUSD breaks below 1.0830 support
August 23, 2023 1:25 pm
EURUSD extended its slide following the disappointing Euro area PMIs, breaking below the 1.0830 support, marked by the lows of June 30 and July 6. The pair is already well below the prior uptrend line drawn from the low of September 26 and it is now testing the 200-day exponential moving average (EMA). A break below that moving average will paint an uglier picture, but the move that could signal a full-scale reversal may be a dip below the key support zone of 1.0665.
The RSI and the MACD are detecting negative momentum and adding to the notion of further declines, at least until 1.0665. The former is below 50, yet still above 30, and it is pointing down, while the latter is lying below both its zero and trigger lines, pointing south as well.
If the bears are strong enough to reach and breach the 1.0665 barrier, which offered strong support in late May and early June, a lower low will be confirmed on the weekly chart and the slide may extend towards the 1.0630 territory, which stopped the pair from falling lower between February 24 and March 15. A potential dip below 1.0630 could have larger bearish implications, perhaps opening the door to declines all the way down to the low of November 30 at 1.0290.
On the upside, the outlook may brighten again upon a recovery above the key resistance zone of 1.1070. Such a recovery may confirm the return of EURUSD above the aforementioned uptrend line and may allow the bulls to aim for the high of July 18 at 1.1280. A break higher may signal a trend continuation and perhaps see scope for advances towards the 1.1480 zone, which offered resistance between January 13 and February 10, 2022.
To sum up, EURUSD fell below the key support zone of 1.0830 and appears ready to break below the 200-day EMA. Although this will paint an uglier picture, the move that could signal a full-scale bearish reversal may be a decisive dip below 1.0665.
EURUSD extended its slide following the disappointing Euro area PMIs, breaking below the 1.0830 support, marked by the lows of June 30 and July 6. The pair is already well below the prior uptrend line drawn from the low of September 26 and it is now testing the 200-day exponential moving average (EMA). A break below that moving average will paint an uglier picture, but the move that could signal a full-scale reversal may be a dip below the key support zone of 1.0665.
The RSI and the MACD are detecting negative momentum and adding to the notion of further declines, at least until 1.0665. The former is below 50, yet still above 30, and it is pointing down, while the latter is lying below both its zero and trigger lines, pointing south as well.
If the bears are strong enough to reach and breach the 1.0665 barrier, which offered strong support in late May and early June, a lower low will be confirmed on the weekly chart and the slide may extend towards the 1.0630 territory, which stopped the pair from falling lower between February 24 and March 15. A potential dip below 1.0630 could have larger bearish implications, perhaps opening the door to declines all the way down to the low of November 30 at 1.0290.
On the upside, the outlook may brighten again upon a recovery above the key resistance zone of 1.1070. Such a recovery may confirm the return of EURUSD above the aforementioned uptrend line and may allow the bulls to aim for the high of July 18 at 1.1280. A break higher may signal a trend continuation and perhaps see scope for advances towards the 1.1480 zone, which offered resistance between January 13 and February 10, 2022.
To sum up, EURUSD fell below the key support zone of 1.0830 and appears ready to break below the 200-day EMA. Although this will paint an uglier picture, the move that could signal a full-scale bearish reversal may be a decisive dip below 1.0665.
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