The EUR/USD pair experienced a downturn during early European trading hours on Monday, putting an end to its four-day winning streak and reaching levels near 1.0830. Analysts suggest a potential downward movement for the pair, with a retest of the nine-day Exponential Moving Average (EMA) at 1.0822 looming.
Technical analysis paints a bearish picture for the EUR/USD pair. The 14-day Relative Strength Index (RSI) sits below the 50 mark, indicating a lack of buying momentum.
Moreover, the Moving Average Convergence Divergence (MACD) remains below the centerline, showing a convergence below the signal line. This configuration signals a potential shift in momentum for the pair, prompting traders to await confirmation from this lagging indicator for clearer trend direction.
In terms of immediate support, the psychological level of 1.0800 stands out, with a breach potentially pushing the pair towards the 1.0750 region, followed by last week’s low at 1.0724.
Conversely, resistance levels are seen at 1.0850, closely aligned with the 50.0% retracement level at 1.0852. A breakthrough above this level could pave the way for further upside towards the 61.8% Fibonacci retracement level of 1.0883, and eventually, the psychological barrier at 1.0900. Traders will monitor these key levels closely for potential market movements.
