EUR/USD Price Analysis: Euro renews multi-day low, further downside towards 1.0840 appears impulsive
- EUR/USD takes offers to refresh six-week low as US Dollar extends FOMC Minutes inspired gains.
- Three-week-old falling support line, multiple levels marked since late June joins oversold RSI to prod Euro bears.
- Bearish MACD signals, sustained trading below key trend lines, SMAs keep sellers hopeful of witnessing further downside.
EUR/USD slides to the fresh low since early July as US Dollar extends the latest run-up during early Thursday. In doing so, the Euro pair drops for the second consecutive day to 1.0866, refreshing the 1.5-month low amid market’s risk-off mood and the firmer US Treasury bond yields.
Also read: EUR/USD licks its wounds at six-week low under 1.0900 as Fed minutes, yields propel US Dollar
Technically, the EUR/USD pair’s sustained trading below the 200-SMA, as well as the previous support line stretched from late May, joins the bearish MACD signals to suggest the major currency pair’s further downside.
However, the oversold RSI (14) line joins a two-month-old horizontal support zone and a descending support line from July 28 to highlight 1.0845-35 as the short-term key support for the pair bears to watch.
In a case where the Euro pair drops below 1.0835, the early June swing high around 1.0780 may act as an intermediate halt for the pair’s fall toward May’s bottom surrounding 1.0635.
On the flip side, the latest swing high of around 1.0930 and 1.1000 round figure may entertain the EUR/USD buyers during a corrective bounce.
However, a downward-sloping resistance line from July 18 and the 200-SMA, respectively near 1.1010 and 1.1025, can challenge the Euro pair’s further recovery.
It’s worth noting that the aforementioned support-turned-resistance line from late May, close to 1.1060 at the latest, acts as the final defense of the EUR/USD sellers.
EUR/USD: Four-hour chart
Trend: Limited downside expected