EURUSD opened with a slight negative gap on Monday around 1.0780 following Friday’s post-NFP crash, which erased February’s gains and squeezed the price below its 20-day exponential moving average (EMA).
Encouragingly, the positive trend from September’s 20-year low remains unchanged above the nearby 1.0760-1.0700 support region. The 50-day SMA and the ascending trendline, which connects all the lows from mid-November, are approaching that area as well. If the sell-off snaps that floor, there are a couple of key levels at which the pair could still gain buying interest. The constraining line from September may come first into view at 1.0560 ahead of January’s low of 1.0480. Note that the 200-day EMA is flattening around the same location. Hence, a decisive close lower would mark a new lower low in the short-term picture, confirming a bearish trend reversal. If that proves to be the case, the price may seek shelter around the long-term resistance-turned-support trendline currently at 1.0400.
Alternatively, the bulls may push back above the 20-day EMA and the 1.0840 barrier. If they succeed, the recovery could strengthen towards Friday’s high of 1.0940, where the 50% Fibonacci retracement of the 1.2348-0.9535 downtrend is positioned. Running higher, the price may attempt to crawl above its previous high of 1.1032 with scope to reach the 1.1115 barricade and then stretch towards the March high of 1.1185 currently near the upper ascending line.
Summing up, although EURUSD has switched back to losses, its bullish trend may preserve buying interest as long as it keeps trading above 1.0480.
