Technical Analysis – EURUSD backs off after new 2023 high
In the meantime, the Average Directional Movement Index (ADX) is dropping aggressively towards its 25-threshold and thus confirming the end of the recent bullish move, and the RSI is again trading a tad above its midpoint. More interestingly, the stochastic oscillator is moving lower in a vertical fashion and building a good gap from its moving average. A continuation of this move and, particularly a drop below the latest stochastic’s trough would be considered a stronger bearish signal.
Should the bears feel energized by the latest drop, they would aim for a move below the busy 1.1032-1.1095 range that is populated by the February 2, 2023 and April 26, 2023 highs respectively. They could then have a go at the 1.0888-1.0896 area. This appears to be a strong support region as it is defined by the 50- and 100-day SMAs. Even lower, the path remains tricky with the next key area coming at the 1.0698-1.0809 range.
On the flip side, the bulls are anxiously trying to set up their defense and regain market control. If they manage to keep EURUSD above the September 28, 2022 upward sloping trend trendline, they might feel confident in breaking the March 31, 2022 high at 1.1184, and then have the chance of recording a new 2023 high above the current high of 1.1275.
To conclude, EURUSD bears are on a mission, but they need to clear some key levels and get some help from the momentum indicators in order to reverse the medium-term bullish trend.Related Assets
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