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Technical Analysis – EURUSD develops within bearish formation
July 26, 2023 3:27 pmVideo
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EURUSD attempted a modest recovery earlier today but the 20-period simple moving average (SMA) in the four-hour chart blocked the way higher once again around 1.1080.
The RSI has changed course to the upside and the MACD is slowly distancing itself from its red signal line, suggesting that market sentiment is improving. Yet, the indicators have yet to exit the bearish region. Therefore, downside pressures could still emerge, especially if the price stays within the downward-sloping channel and below the 1.1080-1.1100 region.
In such a case, the bears might head for the 1.1020-1.1000 support area. If they breach that floor, the decline could reach the 200-period SMA at 1.0980 and then stretch towards the 1.0945 constraining zone, where the resistance-turned-support trendline from May is positioned. A steeper downfall could stabilize lower at 1.0910.
In the event the pair advances above the 1.1100 number, the bulls could again target the 1.1144 bar, where this week’s downfall started. The 50-period SMA is converging towards that territory, while the former resistance line from February could be another interesting spot to watch slightly higher at 1.1170.
Summing up, the negative trajectory in EURUSD could keep sellers in play in the short term, unless the pair successfully climbs above 1.1100.
In fundamentals, the Federal Reserve and the European Central Bank are scheduled to announce their rate decisions today at 18:00 GMT and on Thursday at 12:15 GMT respectively. Hence, traders could enjoy some volatility in the coming sessions.
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