Technical Analysis – EURUSD slides to 1.1700 as bears keep control

EURUSD started the week in negative mode, stretching its two-week old bearish run closer to the 1.1700 base, which proved to be a solid ground for upside reversals in March and more recently in August, though to a lesser extent.

The technical picture does not appear to be in the bulls' favor as the RSI continues to dig lower within the bearish area, while the MACD has slipped back into the negative territory with stronger momentum. The Stochastics have not confirmed oversold conditions either, making a break towards the nine-month low of 1.1663 a likely outcome. If sellers claim that floor, the broken descending trendline and the 2020 support region of 1.1620 – 1.1600 could next catch the fall, delaying any extensions towards the 1.1500 psychological level.

In the positive scenario, where the price sets a nice foothold around 1.1700, the pair may re-challenge the limits from the 1.1800 number, which overlaps with the 23.6% Fibonacci of the 1.2265 – 1.1663 down leg, the 20-day simple moving average (SMA), and the bottom of the Ichimoku cloud. A successful violation at this point would clear the way towards the 38.2% Fibonacci and the 1.1908 barrier, while higher, the pair would mark a new higher high probably near the 50% Fibonacci of 1.1964 and the 200-day SMA, resuming hopes for an up-trending market.

Summarizing, EURUSD is expected to trade bearish in the near term. Failure to hold above 1.1663 would downgrade the outlook both in the short and medium-term picture.

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