**EUR/USD Extends Downward Momentum Amid Bearish Technical Signals**
*Originally reported by InvestingLive.com*
The EUR/USD currency pair continues to experience notable downward pressure, signaling a persistent bearish trend in the foreign exchange market. This trend is driven by a combination of technical weaknesses on the charts and lack of fundamental support for the euro in the near term. As of recent trading sessions, bearish sentiment remains dominant, with the pair hitting its lowest levels since earlier this year and showing few signs of an imminent reversal.
Analysts anticipate that the pair may continue to face selling pressure unless clear signs of bullish reversal patterns or improved macroeconomic support emerge for the euro. Below, we delve into the technical landscape shaping this trend, examine key support and resistance levels, and provide insight into what traders might expect moving forward.
**Current Market Context**
EUR/USD started the week by extending last week’s losses as bearish momentum remains in control of the currency pair. Sellers continue to maintain pressure on the euro with the US dollar strengthening, supported by favorable economic indicators coming out of Washington. In contrast, European data has been mixed or weak, contributing to growing uncertainty surrounding the eurozone’s economic trajectory.
This divergence in economic sentiment between the US and the EU is reflected in the EUR/USD chart, where the pair fails to stage any meaningful rallies. Price action remains deeply rooted in a descending channel and continues to make lower lows and lower highs, underscoring a strong and sustained downtrend.
**Technical Breakdown**
The EUR/USD pair remains heavily guided by technical patterns at this time as traders react primarily to chart trends and key support-resistance levels.
Key technical components behind the continued bearish movement include:
– Price action trading below the 50-day and 200-day moving averages, confirming bearish control
– Persistent lower highs and lower lows on the daily chart, reinforcing the downward trend
– Bearish crossover between moving averages suggesting continued weakness
– Momentum indicators like RSI and MACD showing further upside exhaustion and favoring downside continuation
Overall, the pair lacks bullish divergence and has failed to hold onto minor rebound attempts, indicating weak demand and ongoing bearish pressure.
**Key Support and Resistance Levels**
As the EUR/USD decline gains traction, traders are closely watching technical thresholds for signs of possible reversal or further breakdown.
Support Levels:
– 1.0650: Recently tested support level. A break below here would confirm further downside potential.
– 1.0600: A psychological level that could act as the next magnet for price action should selling continue.
– 1.0500: Considered the next strong technical zone, having provided support in previous market cycles.
Resistance Levels:
– 1.0730: A short-term resistance area formed from recent highs mid-week.
– 1.0800: Represents a former support level that could now act as a ceiling on any bounce.
– 1.0900: Longer-term resistance level; breaking above this would challenge the prevailing bearish trend.
For now, the inability of bulls to break any of the above resistance points leaves the pair vulnerable to fresh lows. A decisive break below 1.0650 could trigger a move toward 1.0600 and possibly even the 1.0500 territory.
**Momentum and Indicator Analysis**
A closer look at momentum indicators further validates the current sluggish sentiment surrounding EUR/USD.
– Relative Strength Index (RSI): The RSI remains comfortably below 50 on the daily chart, signaling bearish momentum. It hovers near oversold territory, suggesting that although the pair is under pressure, a temporary corrective bounce cannot be ruled out. Still, the overall trend remains negative.
– MACD (Moving Average Convergence Divergence): The indicator also reflects downside momentum, with histogram bars deep in negative territory. The MACD line remains below the signal line, another confirmation of bearish control.
– Stochastic Oscillator: Recently entered oversold levels, though not yet offering a confirmed buy signal.
Until these indicators show clearer divergence or reversal signals, traders
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