EUR/USD is nursing losses near 14-month lows below 1.1600
EUR/USD is seeing a fresh bout of selling as the European traders are hitting their desks this Thursday, with the US dollar looking to resume the upside momentum. The renewed uptick in the US Treasury yields is helping the greenback to reverse its pullback from multi-month tops amid the underlying narrative of higher price pressures and the Fed’s normalizing monetary policy sooner than expected. Looking forward, the US Final GDP and Fed Chair Powell’s testimony will be closely followed for fresh trading impetus. However, the month-end, as well as quarter-end flows, will likely remain in play.
From a short-term technical perspective, Thursday’s sell-off in EUR/USD that follows the ongoing consolidative mode has carved out a bear flag formation on the four-hour chart. It is a bearish continuous formation, with a downside break below the rising trendline support at 1.1595 needed on a four-hourly candlestick closing basis to validate the pattern. If that materializes then a drop towards the 1.1500 level cannot be ruled. However, the Relative Strength Index (RSI) sits well within the oversold territory, suggesting that the major could be at risk of a rebound.
Any recovery attempt could meet initial resistance at the 1.1650 psychological barriers, above which the August lows of 1.1664 could be challenged, around where the bearish 21-Simple Moving Average (SMA) hovers.
Any recovery attempt could meet initial resistance at the 1.1650 psychological barriers, above which the August lows of 1.1664 could be challenged, around where the bearish 21-Simple Moving Average (SMA) hovers.