EURUSD remains on a downtrend in the short term despite an upwards correction, which now appears to be fizzling out. The rebound from Friday’s 5-week low of 1.2215 has been halted at the 23.6% Fibonacci retracement of the downleg from 1.2475 to 1.2215. This level is around 1.2275.
Prices are struggling to overcome this resistance region as the RSI has turned neutral around 50 in the 4-hour chart, suggesting little immediate upside momentum. Should the pair overcome this hurdle, another resistance could be met at the 50-period moving average (MA), just under the 1.23 level. A break above the 1.23 mark would open the way towards the 38.2% Fibonacci retracement level of 1.2315. However, without a successful challenge of the 50% Fibonacci around 1.2345, EURUSD will find it difficult to break out of its current bearish phase, which was recently confirmed by the bearish crossover of the 50-MA with the 200-MA.
If price movement turns lower again, immediate support is likely to come from around 1.2255, a previous congestion area. A drop below this region would bring last week’s low of 1.2215 back into scope and open the way towards the near 2-month low of 1.2154 from March 1.
In the medium term, the picture is increasingly of a neutral one, as the pair has been trading sideways since late January.
