Technical Analysis – EURUSD in a rollercoaster mode last month; re-tests 1.0800

Melina Deltas, XM Investment Research Desk

EURUSD recovered its strong sell-off from the 13-month peak of 1.1495 to the three-year low of 1.0635, as it jumped close to the 61.8% Fibonacci retracement level of this downward move at 1.1170. Currently, the price is edging sharply lower again beneath the moving average lines and near the 1.0800 psychological mark.

The market is lacking clear direction in the short-term as it is failing to create a clear trend. The MACD is ready for a bearish cross within its trigger line below the zero line, while the RSI is flattening below its 50-neutral threshold. However, the stochastic oscillator is in process of turning slightly higher in the oversold zone, suggesting a possible upside pullback.

If the price continues to dive, the next support would occur at the three-year low of 1.0635 before plunging to the 1.0500 handle, identified on February 2017. Even lower, the door would open for the January of 2017 trough at 1.0340, confirming the bearish trend in the longer timeframe.

On the other hand, a successful climb above the 23.6% Fibonacci mark of 1.0840 could drive the pair towards the 20-day simple moving average (SMA) at 1.0935 ahead of the 38.2% Fibonacci of 1.0965 and the 40-day SMA at 1.0985. If the buying interest continues and penetrates the previous levels, it could hit the 50.0% Fibonacci of 1.1067, which overlaps with the 200-day SMA.

To sum up, EURUSD has been in a rollercoaster mode over the last month with a trendless market on the table in the short-term. A slip below the three-year low could push the price to a bearish outlook in the long-term timeframe as well.