EURUSD came under renewed selling pressure on Wednesday, plunging to a fresh 22-month low of 1.0864. The 20-day simple moving average (SMA) has remained beneath the 40-day SMA over the last week, suggesting the continuation of the downside trend. However, the technical indicators are increasing chances for a possible reversal as the %K line of the stochastic oscillator completed a bullish cross with the %D line in the oversold zone, while the RSI is sloping north below the 30 level.
A step higher would come only if there is a decisive jump above the 1.0880 resistance and the 20-day SMA currently at 1.0907. The next resistance to have in mind is the 1.0925 barrier before challenging the 23.6% Fibonacci retracement level of the downward wave from 1.1238 to 1.0864 at 1.0952, which coincides with the 40-day SMA. Above that, the 38.2% Fibo of 1.1007 could be a significant level near the one-and-a-half-month falling trend line.
Alternatively, in case of more losses the price could meet support at the 261.8% Fibonacci extension level of the up leg from 1.0990 to 1.1095 at 1.0824, which is near the bullish gap that formed in 2017. More losses could drive the pair even lower towards the 423.6% Fibonacci of 1.0660 ahead of the 1.0560 support level, taken from the bottom on April 2017 bottom.
Overall, the pair is still increasingly bearish as long as it holds below the descending line and more importantly near the 22-month low of 1.0864.
