- EUR/USD’s daily chart suggests the pullback is gathering steam.
- The pair risks falling to key support at 1.1729.
EUR/USD’s daily chart MACD histogram, an indicator used to gauge trend strength and trend changes, is now producing deeper bars below the zero line – a sign of strengthening of the bearish momentum.
The indicator crossed into the negative territory on Aug. 10, indicating a bullish-to-bearish trend change.
The 14-day relative strength index (RSI) has also dived out of an ascending trendline, signaling an end of the uptrend from lows near 1.08 observed in May.
That along with Friday’s bearish engulfing candle suggests scope for a decline to 1.1729 – the lower end of the daily chart sideways channel. A violation there would shift the focus to the rising trendline support, currently at 1.1620. On the higher side, a close above Friday’s high of 1.1883 is needed to invalidate the bearish outlook.
Daily chart
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Trend: Bearish
Technical levels
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