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EUR/USD has bounced off 34-month lows after upbeat German data. Friday’s four-hour chart is showing critical resistance looms, as FXStreet’s analyst Yohay Elam notes.

Key quotes

“Euro/dollar is capped under 1.0820, which has capped it in recent days and has also provided support earlier. Moreover, it is the upper bound of the ‘Macron Gap’ from 2017. Failure to breach it opens the door to fresh falls.”

“The pair’s technical state is exacerbated by the return of the Relative Strength Index on the four-hour chart above the 30 level – implying an exit from oversold conditions. EUR/USD continues trading below the 50, 100, and 200 Simple Moving Averages. Momentum remains to the downside.” 

“Critical support awaits at 1.0777, the new 2020 trough, and the lowest since 2017. The next line to watch is 1.0720.”