EURUSD is returning below the 1.0500 psychological level after the jump towards the 1.0600 barrier. The sideways move within the 1.0345 multi-month low and the 38.2% Fibonacci retracement level of the down leg from 1.1495 to 1.0345 at 1.0780 is continuing with the technical indicators, suggesting a negative bias.
The downside reversal in the RSI and the slowdown in the MACD oscillator justify the selling pressure, both remaining beneath their neutral thresholds keeping the short-term risk skewed to the downside.
Should selling forces strengthen, the more-than-five-year low of 1.0345 will come under the spotlight again before tumbling towards the 1.0220 support level, which is taken from the inside swing high in July 2002. Sliding lower, the next strong obstacle could come from the parity level at 1.0000, which will endorse the downside movement.
Alternatively, a close above the 40-day simple moving average (SMA) would take the currency until the immediate resistance level of the 23.6% Fibonacci of 1.0615. Marginally higher, the 20-day SMA, which overlaps with the 1.0635 resistance, may halt the bullish actions before meeting the medium-term descending trend line at 1.0700. Beyond that, the rally may gear up to the 38.2% Fibonacci of 1.0780.
In brief, EURUSD is facing a weakening bias in a narrow range in the short-term, where a drop below 1.0345 is expected to enhance selling interest in the medium-term outlook.
