This past week, the British pound traded below the key 1.2950 support level against the U.S. dollar. As a result, EUR/USD extended its decline and traded below the main 1.2865 pivot area.
Looking at the 4-hours chart, the pair settled below the 1.2850 level and the 100 simple moving average (red, 4-hours). Finally, the pair traded as low as 1.2725 before starting an upside correction.
The pair recovered above the 23.6% Fib retracement level of the main drop from the 1.3018 high to 1.2725 low. However, the recovery wave failed near the 1.2840-1.2850 resistance area.
Moreover, the pair even failed to test the 1.2865 resistance, and the 50% Fib retracement level of the main drop from the 1.3018 high to 1.2725 low. Above the 1.2865 resistance, the next hurdle is seen near the 1.2950 level, the 100 SMA, and a connecting bearish trend line.
Therefore, the pair is clearly facing many hurdles on the upside, starting with 1.2865 and up to 1.2950. On the downside, an initial support is near the 1.2725 swing low, below which the pair could decline towards the 1.2650 support.