EURUSD has been in the red over the past six weeks, moving within a descending channel to reach six-month lows marginally below the 1.1600 round level on Tuesday. The technical picture now supports that the downside pattern not looking like ending soon, as the price continues to trend far below the Ichimoku cloud and its moving averages.
Momentum indicators are also in bearish territory, with the MACD trapped below zero and its red signal line since the end of April, showing no sign of turning up at the moment. The RSI adds to the negative view as well by fluctuating below 30 in the oversold area. At the same time though, the RSI index hints that further downside movements might not be sustainable, and the market might be on track to make a correction to the upside.
Should the price head lower, a strong support could come at 1.1553, taken from the low on November 7, since any substantial close below that level could confirm further downside pressure, probably towards the 1.1500 key-mark, near the bottom of the channel. Even lower, the next target could be the 1.1400 key-mark
On the other hand, if the price bounces up, the roof of the channel seen around 1.1700 could offer nearby resistance. A break above this area could then open the door for the 20-day simple moving average, currently at 1.1819 before the focus shifts to 1.1920, a previously congested level.
Regarding the medium-term picture, the outlook is likely to hold bearish as long as the market trades below 1.2153, the bottom of the previous trading range that held from mid-January to late April.
