Currently, the price of EUR-USD is experiencing a bearish downtrend, with the price positioned between the 50-day and 200-day moving averages (MA). This analysis will present two plausible scenarios for the market and evaluate the potential levels of support and resistance. Additionally, we will assess the relative strength of the EUR/USD using the Relative Strength Index (RSI) to gain further insights.
Scenario 1: Bearish Continuation
In this scenario, the price of EUR/USD is anticipated to decline further, potentially testing the support level at 1.08769. A successful test at this level could lead to a continuation of the bearish trend, driving the price lower towards the secondary support at the 50% Fibonacci retracement level of 1.08634. If the bearish momentum persists, the market might find significant support at the 1.08403 level, which is considered a crucial test level for this currency pair.
Scenario 2: Bullish Reversal
Alternatively, there is a possibility of a bullish reversal in the EUR/USD market. In this scenario, the price may rise to test the resistance level at 1.09142, which aligns with the 61.8% Fibonacci retracement level. A significant test and break above this level would signal potential further upward movement, with the market potentially testing the 1.09176 level. To confirm a sustained bullish momentum, the price needs to overcome the resistance at the 1.09295 level. If this occurs, the market could push higher, potentially reaching the major psychological level of 1.09416.
At present, the relative strength of the EUR/USD is in a bearish down move. The RSI, which measures the strength and momentum of the market, is currently oscillating in an undecided range. This suggests a lack of clear direction or consensus among traders regarding the future movement of the currency pair.
In conclusion, the EUR/USD currency pair is currently experiencing a bearish downtrend, with the price situated between the 50-day and 200-day moving averages. The analysis presents two scenarios: a continuation of the bearish trend or a potential bullish reversal. Traders should closely monitor the price action around key support and resistance levels, such as 1.08769, 1.08634, 1.08403, 1.09142, 1.09176, 1.09295, and 1.09416, to gauge the market’s future trajectory.