EURUSD created a strong downfall rally on Thursday, sending the price towards a fresh 21-month low beneath the 1.1200 handle, around 1.1175. The pair penetrated the medium-term sideways channel to the downside, completing a new descending channel in the short-term. The pair has not seen a positive day since February 26.
Technically, the RSI indicator is turning slightly to the upside after the decline in the oversold zone, suggesting a possible retracement in the price action, while the MACD oscillator is strengthening its bearish structure below the trigger line in the negative territory.
Should bearish dynamics dominate, and the market drop below the 1.1175 support and the lower band of the channel, the next move could be towards the 1.1115 barrier, registered on June 2017. More downside pressures could open the door for the 1.0830 level, taken from the low on May 2017.
Alternatively, if the price continues the rebound on the 21-month low, immediate resistance is coming from 1.1233, the previous bottom. Further up, the price could rest around the 23.6% Fibonacci retracement level of the downleg from 1.1570 to 1.1175, around 1.1267, while a violation of this point could drive the market until 1.1285, which stands near the 20-day simple moving average (SMA).
In the bigger view, EURUSD has declined considerably shifting the outlook from neutral to significantly bearish as it posted a new lower low.
