• EUR/USD retreats towards intraday low during two-week uptrend, mildly bid after falling the most in three weeks.
  • Clear downside break of weekly bullish channel directs bears towards 200-SMA.
  • Fresh upside needs validation from 1.0040 before aiming for September’s top.

EUR/USD pares the consecutive second weekly gain as it slides to 0.9970 heading into Friday’s European session.

In doing so, the major currency pair justifies the previous day’s downside break of a one-week-old bullish channel to direct bears toward the 61.8% Fibonacci retracement level of the quote’s fall in September.

It’s worth noting that the bearish MACD and mostly steady RSI (14) keep the sellers hopeful of breaking the immediate Fibonacci retracement level, also known as the golden ratio near 0.9950, which in turn could direct prices towards the 50% Fibonacci retracement level of 0.9870. However, the 200-SMA level surrounding 0.9830 could challenge the EUR/USD bears afterward.

In a case where the quote remains weak past 0.9830, a one-month-old ascending trend line precedes the five-week-long horizontal region to challenge the pair’s further downside around 0.9720 and 0.9670 in that order.

Meanwhile, recovery moves need to cross the previous support line of the aforementioned channel, around 1.0050 at the latest.

Even so, the monthly high near 1.0095 and the 1.0100 threshold could test the EUR/USD bulls before directing them to the previous monthly peak of 1.0198.

EUR/USD: Four-hour chart

Trend: Limited downside expected

This article was originally published by Fxstreet.com.Read the original article here.

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