- EUR/USD fell to 1.10955 on Tuesday, erasing 76% of the recent rally.
- Tuesday’s big red candle indicates scope for deeper losses.
EUR/USD has erased a significant chunk of the recent rally and looks set for a deeper drop in the short-term.
The pair is currently trading just above 1.10, having hit a low of 1.0955 on Tuesday. At that level, nearly 76% of the rally from 1.0778 to 1.1495 witnessed in the 12 days to March 3 stood erased.
From a technical perspective, the market sentiment looks to have turned quite bearish. The pair produced a big red candle on Tuesday with small wicks – a sign the sellers were in control from the UTC open to UTC close.
The spot also closed under 1.1052 on Tuesday, violating the 61.8% Fibonacci retracement of the rally from 1.0788 to 1.1495. The pair has also found acceptance under the 200-day average, currently located at 1.1097.
Meanwhile, the 14-day relative strength index (RSI) has dropped into the bearish territory below 50.
All in all, the odds appear stacked in favor of a slide to 1.09, under which major support is seen directly at 1.0778.
On the higher side, a close above Tuesday’s high of 1.1189 is needed to put the bulls back into the driver’s seat.
Daily chart
Trend: Bearish
Technical levels
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