Technical Analysis – EURUSD surrenders line of defense
September 6, 2023 1:28 pm
EURUSD could not crawl above its 200-day exponential moving average (EMA) on Tuesday and the 1.0800 level, plunging to a three-month low of 1.0705 instead. The line had been a critical support territory during 2023 and the price breakout below it puts the market at risk of a new bearish cycle.
Weaker sessions are likely based on the RSI and MACD. However, the Stochastic oscillator seems to be looking for an upside reversal near its 20 oversold level, flagging a rebound opportunity within the support zone of 1.0680-1.0635. If that floor cracks as well, the sell-off may exacerbate towards the 1.0535 base last seen in March 2023. Then, the bears could re-challenge the 2023 low of 1.0480 before heading lower.
Alternatively, the bulls might keep fighting for a close above the flattening 200-day EMA at 1.0800 and beyond the 61.8% Fibonacci mark of the 1.0515-1.1274 upleg. The 20- and 50-day EMAs could appear tough obstacles too at 1.0845 and 1.0895 respectively. Therefore, a durable move above those lines could be a prerequisite for a fast rally towards the 38.2% Fibonacci level of 1.0985. Running higher, the pair would aim for the broken support trendline from September 2022 at 1.1070.
Overall, EURUSD bears have breached a critical support area, exposing the market to another downturn. An extension below 1.0634 would officially indicate a negative trend reversal.
EURUSD could not crawl above its 200-day exponential moving average (EMA) on Tuesday and the 1.0800 level, plunging to a three-month low of 1.0705 instead. The line had been a critical support territory during 2023 and the price breakout below it puts the market at risk of a new bearish cycle.
Weaker sessions are likely based on the RSI and MACD. However, the Stochastic oscillator seems to be looking for an upside reversal near its 20 oversold level, flagging a rebound opportunity within the support zone of 1.0680-1.0635. If that floor cracks as well, the sell-off may exacerbate towards the 1.0535 base last seen in March 2023. Then, the bears could re-challenge the 2023 low of 1.0480 before heading lower.
Alternatively, the bulls might keep fighting for a close above the flattening 200-day EMA at 1.0800 and beyond the 61.8% Fibonacci mark of the 1.0515-1.1274 upleg. The 20- and 50-day EMAs could appear tough obstacles too at 1.0845 and 1.0895 respectively. Therefore, a durable move above those lines could be a prerequisite for a fast rally towards the 38.2% Fibonacci level of 1.0985. Running higher, the pair would aim for the broken support trendline from September 2022 at 1.1070.
Overall, EURUSD bears have breached a critical support area, exposing the market to another downturn. An extension below 1.0634 would officially indicate a negative trend reversal.
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