EUR/USD has recovered from the new four-month lows but leans lower as neared the 2019 low of 1.0879 on Tuesday. Yohay Elam from FXStreet sees the dead cat bounce pattern as an opportunity to sell the pair.
Key quotes
“Another bounce, another selling opportunity? The `dead cat bounce´ pattern is characterizing EUR/USD in February. Every recovery attempt is limited in range and is followed by a fresh four-month low. On Tuesday, the world’s most popular currency pair dipped below 1.09 and already neared the 2019 low of 1.0879.”
“EUR/USD is trading above 1.09 but below the 50, 100, and 200 Simple Moving Averages on the four-hour chart and suffers from downside momentum. Moreover, the Relative Strength Index has risen above 30, outside oversold conditions and allowing for additional falls.”
“Support awaits at the fresh low of 1.0891 recorded on Tuesday. It is followed by 1.0879, the 2019 low.”
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