EUR/USD turned south again, after it hit resistance slightly below the key barrier of 1.1430, which acted as a good support zone on the 9th and 19th of October and provided resistance on the 23rd of the month. The price structure remains of lower peaks and lower troughs below the downside resistance line taken from the peak of the 24th of September and thus, we would consider the near-term outlook to be negative for now.
Currently, the rate looks to be headed towards Friday’s low of 1.1335, the break of which would confirm a forthcoming lower low on the 4-hour chart and may initially aim for the 1.1300 zone, marked by the low of the 15th of August. Another break below 1.1300 may carry more bearish extensions, opening the way for levels last seen in June 2017. Our next potential area of support stands at around 1.1225, near the inside swing peak of the 26th of that month.
Shifting attention to our short-term oscillators, we see that the RSI has been drifting lower since it hit resistance near 50 and now looks to be heading towards its 30 line. The MACD, already negative, has turned down and looks able to drift below its trigger line. These indicators detect downside speed and support the notion for EUR/USD to continue trading lower for a while more.
On the upside, even if the pair rebounds and breaks above 1.1430, we would still consider the near-term picture to be cautiously negative. The rate would still be trading below the aforementioned downside line, from where the bears could take charge again and push the battle lower. We would like to see a clear and decisive move above the psychological zone of 1.1500 before we start examining whether the bulls have gained the upper hand. Such a break could initially aim for the 1.1545 territory, the break of which may set the stage for our next resistance of 1.1610.
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