EURUSD plotted a twenty-eight-month low of 1.0925 after a fall from June 25. The bulls tried for a correction up to the downtrend line, but their efforts were ceased by the 20-day simple moving average (SMA) and the 50.0% Fibonacci retracement level of the down leg from 1.1249 to 1.0925, of 1.1086. The sellers took control at the level and pushed down the price, rejuvenating the prior downward sentiment.
The momentum indicators are signaling that the down move could pause in the short-term, with the MACD marginally above its red trigger line in the negative zone, while the RSI hovers in bearish territory. However, the downwards sloping SMAs suggest the medium-term bearish picture is likely to endure.
If the bears’ revival of the bigger trend manages to move price below the 1.1026 support, the 23.6% Fibo of 1.1000 could apply initial pressure. Breaching the latter, a drop to revisit the twenty-eight-month low of 1.0925 could play out, testing the 1.0955 lower Bollinger band and the 1.0940 support on the way.
For the bulls to become dominant, the price would initially need to climb above the 38.2% Fibo of 1.1050 through the mid-Bollinger band around 1.1075 and the 50.0% Fibo of 1.1086. Moving higher, a more durable resistance around 1.1125, which is the 61.8% Fibo and where the 42-day SMA and downtrend line are presently residing, could halt the attempt. Violating the downtrend line could revive a run upwards to test the swing high of 1.1249, on the condition that the 76.4% Fibo of 1.1172 and the 1.1193 level are surpassed.
Summarizing, to shift the prevailing bearish picture, the price would need to initially close above the 1.1249 swing.
