- EUR/USD takes offers to attack fortnight-old horizontal support comprising yearly low.
- Descending trend line from mid-July, 61.8% FE also challenge the bears.
- Bulls need validation from 100-SMA to retake control.
EUR/USD sellers flirt with the yearly low surrounding the 0.9900 threshold amid mixed concerns and the US Labor Day holiday on Monday. That said, the major currency pair seesaws around 0.9915-20 during the Asian session.
A two-week-old horizontal support area near 0.9910-9900 appears the tough nut to crack for the pair sellers even as the bearish MACD signals hint at the further downside. Also favoring the quote’s south-run is the descending RSI (14) line, not oversold.
It should, however, be noted that the downside break of the 0.9900 round figure won’t be enough to please the EUR/USD bears as a descending support line from mid-July, near 0.9880 could challenge the pair’s additional south-run.
Even if the quote drops below 0.9880, the likely oversold RSI conditions at that point could join the 61.8% Fibonacci Expansion (FE) of August 15-26 moves, near 0.9860, to restrict the pair’s further weakness.
In a case where EUR/USD breaks the 0.9860 support, it becomes vulnerable to testing the October 2002 lows near 0.9685.
Alternatively, recovery remains elusive until crossing the 100-SMA hurdle surrounding 1.0050.
Following that, the late July swing low near 1.0100 could test the EUR/USD upside before giving control to the bulls.
EUR/USD: Four-hour chart
Trend: Limited downside expected