- EUR/USD pares intraday losses after refreshing 20-year low.
- Six-month-old bearish channel, clear downside break of two-month-long support line favor bears.
- Oversold RSI conditions, descending support line from late July tests sellers.
- Recovery remains elusive below the parity level, early 2001 levels may offer extra downside filters.
EUR/USD dropped to the lowest levels since June 2002 before recently bouncing back to 0.9660 during Monday’s Asian session. Even so, the bearish chart formation and sustained trading below the previous key support line from July, now resistance around 0.9830, keeps the pair sellers hopeful.
That said, the recovery moves towards the 0.9830 hurdle can also take clues from the recently oversold RSI (14).
However, the EUR/USD bulls will have to cross the upper line of the bearish channel from March, around 1.0015 by the press time, to convince the buyers to take entry.
Following that, a run-up towards the monthly high near 1.0200 can’t be ruled out.
Alternatively, a daily closing below the downward sloping trend line from July 27, at 0.9640 by the press time, could revisit the January 2001 peak surrounding 0.9600 before dropping towards the support line of the aforementioned channel near 0.9480.
Overall, EUR/USD bears keep the reins but the corrective pullback towards 0.9830 can’t be ruled out.
EUR/USD: Daily chart
Trend: Bearish