Technical Analysis – EURUSD trades sideways after sharp drop
EURUSD rotates lower after its advance gets rejected
Trades flat in past few sessions within the Ichimoku cloud
Momentum indicators weaken but remain positive
EURUSD had been in a steady recovery from its 2024 bottom of 1.0693, advancing to as high as 1.0980 on March 8. However, the pair’s rebound was rejected after a temporary jump above the Ichimoku cloud, with the short-term oscillators deteriorating significantly but holding above their neutral zones.
Should the recent weakness persist, the price could fall below both its 50- and 200-day simple moving averages (SMAs) and test the February-March support of 1.0795. Sliding beneath that floor, the price may descend towards the December bottom of 1.0722. Even lower, the 2024 low of 1.0693 could provide downside protection.
Alternatively, if the pair reverses back higher, immediate resistance could be found at 1.0963 ahead of the recent rejection region of 1.0980. A violation of the latter could pave the way for the November high of 1.1016. Further advances may then encounter resistance at the April 2023 peak of 1.1094.
In brief, EURUSD has been relatively quiet in the past couple of sessions, hovering within its Ichimoku cloud after its attempt for recovery got rejected. Nevertheless, the ascending 200-day SMA is closing the gap with the 50-day SMA, where a potential death cross could trigger a new round of weakness.
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