- EUR/USD remains on the back foot near the lowest levels in two months.
- Poised for further downside on key SMA breakdown, bearish Momentum.
- Horizontal area from early February lures sellers, bulls have a bumpy road to return.
EUR/USD bears take a breather with mild losses around 1.1990, following the heaviest slump since March 2020, during Thursday’s Asian session. Even so, the quote remains below 200-day SMA (DMA) amid a downbeat Momentum line, suggesting further declines.
However, a horizontal area comprising multiple levels marked since early February around 1.1950-40 could restrict the quote’s immediate downside.
Also acting as the key support is the 61.8% Fibonacci retracement of November 2020 to January 2021 upside, near 1.1890.
If at all the quote remains offered below 1.1890, the early March lows of 1.1835 and the yearly bottom surrounding 1.1700 will be crucial to follow.
Meanwhile, a clear upside break of 200-SMA, around 1.2000, isn’t a free pass to the EUR/USD buyers as Friday’s bottom surrounding 1.2090 and early June’s low close to 1.2105 could restrict the pair’s recovery moves.
Also likely to challenge the pair’s upside could be the 23.6% Fibonacci retracement level of 1.2175 and a horizontal line stretched from late February around 1.2245.
To sum up, EUR/USD may witness a consolidation based on the Momentum line’s conditions but bulls are far from back to normal life.
EUR/USD daily chart
Trend: Further weakness expected