- EUR/USD reveres the corrective bounce off 10-week low, lacks momentum of late.
- Bearish MACD signals, sustained trading below 100-DMA and key resistance line keeps Euro sellers hopeful.
- Cautious mood ahead of the key US data, Jackson Hole speeches also prod pair buyers.
- Convergence of ascending trend line from mid-March, 200-DMA appears a tough nut to crack for EUR/USD bears.
EUR/USD retreats from intraday high to 1.0860 as it pares the previous day’s corrective bounce off a 2.5-month low early Thursday. In doing so, the major currency pair fades the previous day’s rebound from the 1.0800 support confluence comprising the 200-DMA and an ascending support line from March 15.
The Euro pair’s latest pullback could be linked to the market’s cautious mood ahead of the United States data and the start of the two-day-long annual Jackson Hole Symposium. Among the US statistics, the US Durable Goods Orders, Chicago Fed National Activity Index, Kansas Fed Manufacturing Activity and weekly Jobless Claims will gain major attention.
Apart from pre-event anxiety, the bearish MACD signals also challenge the EUR/USD buyers.
However, the RSI (14) line is nearly oversold and hence suggests bottom-picking of the EUR/USD pair, which in turn highlights the 1.0800 key support including the 200-DMA and a 5.5-month-long rising trend line.
Even if the EUR/USD pair drops below 1.0800, tops marked in mid-March and early June, around 1.0780 and 1.0760 will act as additional checks for the bears.
Alternatively, the 100-DMA and a downward-sloping resistance line from early May, close to 1.0930 and 1.0940 in that order, challenge the EUR/USD buyers ahead of the 1.1000 psychological magnet.
In a case where the Euro bulls keep the reins past 1.1000, June’s peak of around 1.1015 will act as the final defense of the sellers before directing the prices toward the monthly high of around 1.1065.
EUR/USD: Daily chart
Trend: Limited downside expected