- EUR/USD seesaws between 50-DMA and monthly resistance, previous support.
- Downward sloping Momentum line, descending channel keep sellers hopeful.
- Bulls have a bumpy road ahead unless crossing May’s top.
EUR/USD defends the 1.2100 threshold while taking rounds to 1.2110 during Monday’s Asian session. The pair dropped below an ascending support line from May 13. However, 50-day SMA (DMA) restricts the quote’s short-term downside.
Although descending Momentum line backs the trend line breakdown to favor EUR/USD sellers, a clear break of the 50-DMA level of 1.2100 becomes necessary to confirm the further weakness of the quote. Also acting as a downside filter is the support line of a three-week-old falling channel, near 1.2070.
In a case where the quote remains pressured below 1.2070, May 13 low around 1.2050 and 200-day SMA close to 1.1995 become the key supports to watch.
Meanwhile, the corrective pullback will be probed by the previous support line near 1.2130, a break of which should direct EUR/USD buyers towards the stated channel’s resistance line, at 1.2200.
Even if the currency major pair manages to cross 1.2200 on a daily closing, the previous month’s high near 1.2265 acts as an extra barrier to the north.
EUR/USD daily chart
Trend: Further weakness expected