Technical Analysis – EURUSD suffers another setback; bias bearish
May 18, 2023 3:27 pm
EURUSD plummeted to an almost eight-week low of 1.0782 on Thursday following the pullback from the 50-day exponential moving average (EMA), increasing the likelihood of a bearish continuation.
The price flipped back below its falling 20- and 50-day EMAs, with the technical oscillators flagging another discouraging session ahead. Specifically, the MACD has dropped into the negative region for the first time since March. Meanwhile, the RSI has extended its downtrend below its 50 neutral mark, though it’s currently a short distance away from its 30 oversold mark, suggesting that the decline may pause soon. Likewise, the stochastic oscillator has reached its previous lows below its 20 oversold mark.
Should sellers breach the 1.0760 handle, the next pivot point could develop somewhere between the 1.0700 psychological level and the 1.0665 mark. The extension of the September-November ascending trendline and the 200-day EMA are making this area important to watch. Hence, a decisive close lower could generate another bearish correction towards the 38.2% Fibonacci retracement of the 2020-2022 downtrend at 1.0600. The short- and medium-term outlook could worsen if the floor at 1.0515 collapses as well.
On the upside, the 1.0845-1.0885 constraining zone could ruin any recovery attempt along with the 20- and 50-day EMAs. The 50% Fibonacci area of 1.0940 could next come on the radar ahead of the crucial 1.1055-1.1094 region if the bulls persist. Should the uptrend resume above 1.1100, the price may rise rapidly up to 1.1185-1.1220 territory last seen in November 2021-March 2022.
In brief, the bearish phase in EURUSD may continue further in the short term. An extension below 1.0760 could take a halt within the key 1.0700-1.06650 zone.
EURUSD plummeted to an almost eight-week low of 1.0782 on Thursday following the pullback from the 50-day exponential moving average (EMA), increasing the likelihood of a bearish continuation.
The price flipped back below its falling 20- and 50-day EMAs, with the technical oscillators flagging another discouraging session ahead. Specifically, the MACD has dropped into the negative region for the first time since March. Meanwhile, the RSI has extended its downtrend below its 50 neutral mark, though it’s currently a short distance away from its 30 oversold mark, suggesting that the decline may pause soon. Likewise, the stochastic oscillator has reached its previous lows below its 20 oversold mark.
Should sellers breach the 1.0760 handle, the next pivot point could develop somewhere between the 1.0700 psychological level and the 1.0665 mark. The extension of the September-November ascending trendline and the 200-day EMA are making this area important to watch. Hence, a decisive close lower could generate another bearish correction towards the 38.2% Fibonacci retracement of the 2020-2022 downtrend at 1.0600. The short- and medium-term outlook could worsen if the floor at 1.0515 collapses as well.
On the upside, the 1.0845-1.0885 constraining zone could ruin any recovery attempt along with the 20- and 50-day EMAs. The 50% Fibonacci area of 1.0940 could next come on the radar ahead of the crucial 1.1055-1.1094 region if the bulls persist. Should the uptrend resume above 1.1100, the price may rise rapidly up to 1.1185-1.1220 territory last seen in November 2021-March 2022.
In brief, the bearish phase in EURUSD may continue further in the short term. An extension below 1.0760 could take a halt within the key 1.0700-1.06650 zone.
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