Technical Analysis – EURUSD could challenge bearish channel
October 9, 2023 4:27 pm
EURUSD consolidates recent gains within bearish channel
There is potential for more upside, but a close above 1.0640 required
EURUSD opened with a slight negative gap at 1.0549 on Monday due to the unexpected war situation in Israel, staying below the 20-day exponential moving average (EMA) and the 1.0600 level.
After eleven weeks of decline, the pair saw slight gains last week, fueling optimism for a potential bull market. The RSI and the stochastic oscillator have clearly bounced off their oversold levels, endorsing that scenario, though the former has yet to climb above its 50 neutral mark, witnessing some persisting caution in the market.
A durable move above the 20-day EMA at 1.0600 and the bearish channel at 1.0640 could activate fresh buying orders, bringing the 50- and 200-day EMAs under examination within the 1.0716-1.0763 region. The 38.2% Fibonacci mark of the ongoing downtrend is in the same neighborhood. Hence, a victory there could encourage more buying up to the 50% Fibonacci level of 1.0860.
Alternatively, if sellers claim the 1.0500 floor, the price could revisit the channel’s lower bound at 1.0380. The 1.0316-1.0240 territory had eliminated downside pressures in November-December 2022 and could resume its protective role, delaying any declines to 1.0162.
In brief, the latest rebound in EURUSD looks promising, but traders might prefer to wait for a confirmation signal above 1.0640 before raising their buying orders.
EURUSD consolidates recent gains within bearish channel
There is potential for more upside, but a close above 1.0640 required
EURUSD opened with a slight negative gap at 1.0549 on Monday due to the unexpected war situation in Israel, staying below the 20-day exponential moving average (EMA) and the 1.0600 level.
After eleven weeks of decline, the pair saw slight gains last week, fueling optimism for a potential bull market. The RSI and the stochastic oscillator have clearly bounced off their oversold levels, endorsing that scenario, though the former has yet to climb above its 50 neutral mark, witnessing some persisting caution in the market.
A durable move above the 20-day EMA at 1.0600 and the bearish channel at 1.0640 could activate fresh buying orders, bringing the 50- and 200-day EMAs under examination within the 1.0716-1.0763 region. The 38.2% Fibonacci mark of the ongoing downtrend is in the same neighborhood. Hence, a victory there could encourage more buying up to the 50% Fibonacci level of 1.0860.
Alternatively, if sellers claim the 1.0500 floor, the price could revisit the channel’s lower bound at 1.0380. The 1.0316-1.0240 territory had eliminated downside pressures in November-December 2022 and could resume its protective role, delaying any declines to 1.0162.
In brief, the latest rebound in EURUSD looks promising, but traders might prefer to wait for a confirmation signal above 1.0640 before raising their buying orders.
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