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MTrading Team • 2023-07-31

EURUSD tests sellers by bouncing off 1.0970 support

EURUSD tests sellers by bouncing off 1.0970 support

EURUSD dropped in the last two consecutive weeks as it fades bounce off a two-month-old rising support line. The recovery previously gained support from the RSI’s rebound from the overbought territory, as well as the looming bull cross on the MACD. However, a convergence of the 50-SMA and a fortnight-long falling resistance line, close to 1.1100-1105 at the latest, restricts the immediate upside. a horizontal area comprising multiple tops marked since July 21, close to 1.1150, also likely to challenge the Euro buyers should they manage to keep the reins past 1.1105. Following that, a run-up towards the yearly top marked during mid-July around 1.1275 can’t be ruled out.

On the contrary, fresh selling needs validation from the aforementioned multi-day-old rising support line, close to 1.0970 at the latest. In a case where the EURUSD bears manage to break the 1.0970 support, it can quickly drop to the monthly low of around 1.0835. However, the 78.6% Fibonacci retracement of the May-July upside, near 1.0780, will check the Euro bears afterward, a break of which will direct the price towards May’s low of near 1.0635.

Overall, EURUSD signals a corrective bounce but the bullish trend remains elusive unless the quote remains below 50-SMA and immediate trend line confluence, near 1.1100-05.

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