- EURUSD turns flat around 1.0790
- But momentum indicators stuck deep in bearish territory
EURUSD has steadied around 1.0790 after its rebound from the 16-week low of 1.0760 faltered. However, whilst there is slight positive energy on Monday, with the price inching higher, the momentum indicators are overwhelmingly within the bearish zone.
Nevertheless, the selling pressure appears to be easing and a bullish reversal is possible in the near term as the RSI has flatlined just above the oversold level while the MACD has just crossed above its red signal line.
However, for any rebound attempt to succeed, the bulls would first need to overcome the immediate obstacle of 1.0800. A climb above it would clear the path towards the 50% Fibonacci retracement of the July-October 2023 downleg at 1.0861. The 200-day simple moving average (SMA) is descending towards it, making this a critical resistance area. Higher up, the 61.8% Fibonacci of 1.0959 is the next major hurdle before attention turns to the 1.1000 handle and the 50-day SMA that’s approaching it from above.
If, though, the price dips lower again, the October low of 1.0760 is likely to be revisited. A break below it would reinforce the bearish outlook in the medium term and the focus would then shift to the 1.0680 support and the April trough of 1.0600.
To sum up, there is some hope of an upside reversal in the near term despite the bearish signals. But for any rebound to get off on a solid footing, the price would have to recover at least until the 200-day SMA.
Source by: XM Global