EURUSD’s Recent Bearish Tendency to be Tested this Week

• EURUSD trades sideways in anticipation of this week’s key market events
• It remains below the various simple moving averages employed
• Momentum indicators support the current bearish move

EURUSD is moving sideways today amidst a quieter start of the week due to the Easter Monday holiday observed in Europe. EURUSD has been on the retreat after repeatedly failing to break above the December 28, 2023 descending trendline and it is currently hovering below the 50-, 100- and 200-day simple moving averages (SMA). The bears are probably interested in recording a new 2024 low and, at this stage, they appear to enjoy the support of the momentum indicators.

More specifically, the RSI has dipped below its 50-midpoint, and the Average Directional Movement Index (ADX) remains stuck below its 25-threshold and thus pointing to a trendless market in EURUSD. More importantly, the stochastic oscillator is hovering at its oversold territory (OS). It can stay there for a while before attempting to climb higher.

Should the bears remain confident, they could try to push EURUSD decisively towards the 1.0727-1.0735 area, which is populated by the December 15, 2022 high and the 23.6% Fibonacci retracement of the September 28, 2022 – July 18, 2023 uptrend. If successful, they could then have the chance to record a new 2024 low and possibly target the next likely support area at 1.0635.

On the flip side, the bulls are desperately trying to regain market control and push EURUSD back above the 1.0800-1.0873 area where the 50-, 100- and 200-day SMAs currently reside. They could then have a go at retesting the resistance set by December 28, 2023 descending trendline. If they manage to overcome this trendline, they could then set sail for the key 1.1032-1.1095 range.

To sum up, EURUSD bears have taken advantage of the recent newsflow but their efforts could prove inadequate if they fail to record a new 2024 low soon.