Technical Analysis – EURUSD builds floor around 1.07, but risks remain
May 30, 2023 3:27 pm
EURUSD faced a flash correction to a new two-month low of 1.0671 on Tuesday, but it quickly recouped its losses to trade back in the 1.0700 zone.
The pair aims for an upside correction slightly above the 200-day exponential moving average (EMA), as the RSI and the stochastic oscillator hint at overbought conditions. Yet, with the RSI hovering well below its 50 neutral mark and the MACD holding below its red signal line, sellers could easily retake control. Note that the 20-day exponential moving average (EMA) has clearly crossed below the 50-day EMA for the first time since June 2021, backing the negative trajectory in the price.
The tough 1.0757-1.0820 resistance area, which includes a couple of key trendlines, the 50% Fibonacci retirement of the previous upleg, and the 20-day EMA, could ruin bullish efforts. If the price slips below the 61.8% Fibonacci level of 1.0700 and the 200-day EMA too, it may initially retest the pandemic low and the 1991 floor of 1.0635-1.0600 before reaching the 2023 base of 1.0515.
In the event of a bullish breakout above 1.0820, the focus will shift to the 38.2% Fibonacci of 1.0873. A move higher could get congested around the 1.0900 bar. If not, then the recovery may continue towards the 23.6% Fibonacci mark of 1.0957.
Summing up, EURUSD seems to have found an ideal place for a rebound, though downside risks may remain in place unless the pair climbs above the 1.0757-1.0820 region.
EURUSD faced a flash correction to a new two-month low of 1.0671 on Tuesday, but it quickly recouped its losses to trade back in the 1.0700 zone.
The pair aims for an upside correction slightly above the 200-day exponential moving average (EMA), as the RSI and the stochastic oscillator hint at overbought conditions. Yet, with the RSI hovering well below its 50 neutral mark and the MACD holding below its red signal line, sellers could easily retake control. Note that the 20-day exponential moving average (EMA) has clearly crossed below the 50-day EMA for the first time since June 2021, backing the negative trajectory in the price.
In the event of a bullish breakout above 1.0820, the focus will shift to the 38.2% Fibonacci of 1.0873. A move higher could get congested around the 1.0900 bar. If not, then the recovery may continue towards the 23.6% Fibonacci mark of 1.0957.
Summing up, EURUSD seems to have found an ideal place for a rebound, though downside risks may remain in place unless the pair climbs above the 1.0757-1.0820 region.
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