- EUR/USD licks its wounds around one-week low after two-day downtrend.
- Momentum retreat, failures to cross four-month-old horizontal hurdle favor sellers.
- July’s bottom lures the bears until the quote stays below 50-DMA.
EUR/USD holds lower ground near 1.1840, close to the weekly bottom, during the initial Asian session on Thursday. The major currency pair dropped the most in three weeks the previous day.
That said, the quote’s latest moves struggle with the 10-DMA amid a downward sloping Momentum line, which in turn favors the continuation of the bearish impulse.
Hence, the pair’s further weakness towards 1.1800 becomes imminent but any further weakness will be challenged by 1.1780 and a horizontal area comprising multiple levels since late March, near 1.1760-50.
In a case where the EUR/USD prices remain weak past 1.1750, the yearly low of 1.1700 will be in focus.
On the flip side, a clear break of 10-DMA level near 1.1845 needs to cross the June 18–21 bottom surrounding 1.1850, as well as mid-July tops close to 1.1880 before directing the buyers towards a four-month-long horizontal resistance zone close to 1.1910-15.
Even so, 50-DMA and late June’s high, respectively near 1.1940 and 1.1975, not to forget the 1.2000 psychological magnet, could challenge the EUR/USD bulls.
EUR/USD: Daily chart
Trend: Further weakness expected