- EUR/USD fades bounce off seven-week-old horizontal support, retreats from 61.8% Fibonacci retracement level.
- RSI pullback favors the latest U-turn in Euro prices, suggesting further downside.
- Convergence of 50-SMA, monthly resistance line challenges buyers.
EUR/USD stays depressed around 1.0680-75 as it reverses the previous day’s corrective bounce during early Monday.
In doing so, the Euro pair retreats from the 61.8% Fibonacci retracement level of its January-February upside moves. The pullback also takes clues from the RSI’s (14) hesitance in rising further to favor sellers.
With this, the EUR/USD bears are all set to revisit the 1.0630-15 support area comprising multiple levels marked since early January 2023.
Following that, the 1.0600 and 1.0500 may entertain the EUR/USD sellers before directing them to the previous monthly low surrounding 1.0480. It should be noted that November’s top adds strength to the 1.0480 support.
Meanwhile, recovery moves may initially aim for the 61.8% Fibonacci retracement level surrounding 1.0700, also known as the golden Fibonacci retracement.
However, major attention will be given to a convergence of the 50-SMA and a downward-sloping resistance line from February 01, close to 1.0705-10.
In a case where EUR/USD remains firmer past 1.0710, the odds of witnessing a north-run towards the monthly high of 1.1033 can’t be ruled out.
That said, the previous weekly top of near 1.0800 acts as an extra filter to the north.
Overall, EUR/USD is likely to decline further, even as the downside room appears limited.
EUR/USD: Four-hour chart
Trend: Further downside expected
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