The EUR/USD pair continued its upward momentum on Monday, marking its third consecutive day of gains as it traded around 1.0440 during the Asian session. However, an analysis of the daily chart reveals a persistent bearish bias, with the pair confined within a descending channel pattern.
Bearish Momentum Persists
The 14-day Relative Strength Index (RSI), a key momentum indicator, remains below the 50 mark, confirming that the bearish sentiment surrounding the EUR/USD pair is still intact. While there has been some recent improvement, the overall downward trend remains dominant. Furthermore, the nine-day Exponential Moving Average (EMA) sits below the 14-day EMA, signaling weaker short-term price momentum and suggesting that downward pressure on the pair may persist.
Support and Resistance Levels
On the downside, the two-year low of 1.0332, recorded on November 22, stands as immediate support for the EUR/USD pair. A break below this level could reinforce the bearish outlook and push the pair toward the lower boundary of the descending channel, near the 1.0090 level.
On the upside, the pair is currently testing resistance at the nine-day EMA, located at 1.0449, followed by the 14-day EMA at 1.0470. A successful break above these levels could shift momentum in favor of the bulls, potentially driving the pair toward its six-week high of 1.0630.
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