The EUR/USD pair is currently experiencing a bearish momentum on the weekly timeframe, coupled with short-term bearishness on a 240 Minute chart as it hovers around the 1.09770 level. To prove this, the price lies below the 50 and 200-day moving averages.
Scenario 1: If the price should continue from its current levels, a downtrend could ensue, leading to a test of the 1.09427 support level. A successful test at this level might propel the price further downwards towards 1.09171, with the next significant support at 1.09142. Depending on prevailing market sentiment, we may witness the price testing the 1.08960 to 1.08640 range. Key support levels to monitor are found at 1.08446 to 1.08231, while 1.08960 assumes a pivotal role as a major support level. Breaching these levels could signal further bearishness.
Scenario 2: If the price manages to gain upward traction, it could retest the 1.10365 level, strategically located near the 61.8% Fibonacci retracement level. Should this test succeed, we may witness further upward movement towards the 1.10514 level, followed by the 1.10593 level. Subsequently, higher targets of 1.10739 and 1.10931 come into play. If the bullish momentum persists, the price could extend its ascent to the 1.11071 to 1.11191 levels. The critical resistance levels to keep a close eye on are positioned at 1.11290 and 1.11662.
In the event of a bearish market sentiment, the price may revisit the levels witnessed in the previous week.
At present, the Relative Strength Index (RSI) shows an undecided range, although we have observed a decrease in momentum on the weekly timeframe. As technical analysts, we must carefully monitor these developments and keep a keen eye on price action to gauge the market’s future direction.
