Strong downside potential drove EUR/USD considerably lower on Friday. After failing to surpass the 200-hour SMA, the pair fell 76 pips down to 1.2280. This level coincides with the weekly S2.
Even though technical indicators are located in the oversold territory, some downwards potential might still occur today. The nearest support is provided by a trend-line and the 38.20% Fibonacci retracement, while the weekly S2 and the senior channel are located at 1.2220. It is, however, unlikely that the latter is reached within the following trading session.
Meanwhile, gains are likely to be limited by the 55-hour SMA near 1.2330. This area is likewise reinforced by the monthly PP and the weekly S1.
Even if a fall occurs within the following hours, bulls are expected to prevail during the second part of the day.
