- EUR/USD struggles to extend corrective bounce off multi-day low.
- Bearish MACD signals, market’s cautious mood prod Euro buyers.
- RSI conditions, clear break of previous key resistances keep buyers directed towards 100-DMA.
- Sellers need validation from five-month-old ascending support line to retake control.
EUR/USD remains sidelined around 1.0730-35 as bulls seek more clues to extend the previous day’s recovery from a 10-week low amid Wednesday’s sluggish Asian session. In doing so, the Euro pair portrays the market’s anxiety as the key European/US data and events stand ready to prod the market’s momentum.
Also read: EUR/USD rebound pauses around 1.0750, German inflation, US employment clues eyed
That said, the Euro pair’s successful trading above a downward-sloping trend line from early May, around 1.0725, as well as the 61.8% Fibonacci retracement of its January-May upside, near 1.0715, joins the nearly oversold RSI (14) line to keep the buyers hopeful of further upside.
However, the bearish MACD signals and a horizontal area comprising multiple levels marked since mid-March, close to 1.0760, appear a tough nut to crack for the EUR/USD bulls.
Even if the Euro buyers manage to cross the 1.0760 hurdle, the 100-DMA level surrounding 1.0815 can act as the last defense of the bears.
Meanwhile, the EUR/USD pair’s downside remains elusive unless it drops back below the aforementioned 61.8% Fibonacci retracement level, also known as the golden ratio, around 1.0715. It should be noted that the resistance-turned-support line near 1.0725 limits the immediate downside of the quote.
In a case where the EUR/USD drops below 1.0715, the 1.0700 round figure and an upward-sloping support line from March 15 will be in the spotlight.
EUR/USD: Daily chart
Trend: Further recovery expected
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