Technical Analysis - EURUSD pulls back but 50-day SMA curbs decline
EURUSD has experienced a downside correction after its latest advance got rejected at the 1.1011 territory on June 22. Even though the pair temporarily bounced off the congested region that includes its 50-day simple moving average (SMA) and the upper boundary of the Ichimoku cloud, the bears continue to apply downside pressure.
The momentum indicators currently suggest that the positive momentum is waning. Specifically, the MACD has dropped below its red signal line but remains positive, while the stochastic oscillator is descending after posting a bearish cross.
Should the price pierce through its 50-day SMA, the recent support of 1.0834 could act as the first line of defense. A violation of that zone could turn the attention to 1.0790 before the May low of 1.0633 gets tested. Failing to halt there, the pair may retreat towards the March double-bottom region of 1.0515.
On the flipside, if the bulls manage to regain control, the price could initially face the recent rejection region of 1.1011. Clearing this level, the pair could advance towards the February peak of 1.1032. A break above that zone could open the door for the 14-month high of 1.1094.
In brief, EURUSD’s latest pullback came to a halt at the 50-day SMA, but the momentum indicators are currently tilted to the bearish side. Therefore, a potential break below this crucial technical zone could trigger a significant decline
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
