- EUR/USD’s chart shows bull fatigue and suggests scope for a pullback.
- Sustained risk-off would weaken the case for a pullback.
EUR/USD is currently trading in the red near 1.14, having failed multiple times in the last two trading days to chew through offers near 1.15.
The bull failure to push through 1.15 and the subsequent pullback to 1.14 is indicative of buyer exhaustion.
Alongside that, the relative strength index on the daily and intraday charts is also signaling overbought conditions with an above-70 print.
So, a notable pullback toward the ascending 5-day average, currently at 1.13 cannot be ruled out.
The case for a pullback, however, would weaken if the risk aversion in the equity market worsens, boosting haven demand for the single currency. At press time, the futures on the S&P 500 are reporting a 1.6% gain.
The Dow Jones Industrial Average fell by 7.8% on Monday, its biggest single-day decline ever, as prospects of an all-out Saudi-Russia oil price war bolstered the coronavirus-led risk-off sentiment in the market.
6-hour chart
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Trend: Pullback likely
Technical levels
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