- EUR/USD has charted a bearish lower high at the 200-hour momving average resistance.
- A breakout on USD/CNH could yield a bigger drop in EUR/USD.
EUR/USD picked up a bid around 1.1159 in early Asia, but failed to take out the 200-hour moving average (MA) resistance at 1.1173 and is now trading at 1.1165.
The currency pair has essentially established a second bearish lower high, having ended the corrective bounce from the May 23 low of 1.1107 at 1.1215 on Monday.
The path of least resistance, therefore, is to the downside. The currency pair may drop well below the recent low of 1.1107 if the bull flag seen on USD/CNH’s daily chart is breached on the higher side. That would pave way for a break above 7.00, leading to a broad-based USD rally.
The EUR/USD’s outlook would turn bullish if and when the pair finds acceptance above the 50-day moving average, currently at 1.1220.
Hourly chart
Trend: Bearish
Pivot points
Share
