Technical Analysis: EUR/USD Downside Risks Look To Accelerate

EURUSD continues to fade far beneath its simple moving averages (SMAs) heading for the April 5 low of 1.1737 and the adjacent March 31 trough of 1.1703.

The ping 50- and 100-day SMAs are endorsing negative price action, and the near completion of a bearish crossover of the 200-day SMA, also by the 50-period SMA, could boost the downward trajectory. The negative charge and the widening in the Ichimoku lines are indicating that bearish forces are still active, while the short-term oscillators are painting a dampening picture with downside momentum in the lead. The MACD below zero is holding above its flattening red trigger line but looks set to return beneath it, while the RSI is struggling to make headways in the bullish region. The stochastic oscillator has reclaimed a negative bearing, suggesting the bears may be seizing the upper hand. If the pair maintains the current trajectory, sellers may face critical support from the nearby 1.1737 low and the March 31 trough of 1.1703. Should these obstacles break down, the bears could then turn their focus to the vital support base of 1.1600-1.1630 moulded between the September and November 2020 lows, a breach of which could give credence to negative forces. Should a violation mature beneath this foundation, the price may snowball towards the 1.1451-1.1496 barricade. If buying orders amplify, friction for buyers could commence from the red Tenkan-sen line at 1.1820 ahead of the important 1.1900 handle. Conquering this, buyers would need to muster a profound upward drive to tackle a significantly reinforced resistance section from the blue Kijun-sen line at 1.1950 until the Ichimoku cloud’s upper surface at 1.2055. Surpassing this congested zone of upside deterrents, the price could pilot towards the June 15 high of 1.2147. Summarizing, in the short-term timeframe EURUSD is sustaining a neutral-to-bearish tone underneath its SMAs and the 1.1900 mark. Yet, a push above the cloud at 1.2055 may bolster buyers’ belief in a sturdy climb.

190721_EURUSD Daily

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