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EUR/USD Finds Footing Near 23.6% Fibo; Upside Bias Weak

ByXM Group
AuthorTrading Point
Published 06/21/2021, 05:55 AM
Updated 02/07/2024, 09:30 AM
EURUSD

has steadied slightly above 1.1856, which is the 23.6% Fibonacci retracement of the January-March downleg, following the sharp slide from the 1.21 vicinity last week. However, the upside pressure is extremely weak as momentum indicators remain deep in bearish territory.

The MACD histogram has slumped below zero, falling far beneath its red signal line. The stochastics are also buried in the oversold zone below 20 and the %K line is barely ticking higher. However, should it manage to complete its bullish crossover with the %D line, the positive momentum might strengthen more substantially.

But for the moment, the odds for further losses are higher, especially if the immediate support of 1.1846 formed by last week’s 2½-month trough is breached. A break lower would pave the way for a revisit of the March low of 1.1703, while lower still, the November 2020 trough of 1.1622 would come within sight.

If, though, the pair can stay on a positive footing long enough to achieve a solid rebound, the 38.2% Fibonacci of 1.1950 is the first major resistance that needs to be overcome. Higher up, the 200-day moving average (MA) could cause trouble around 1.1991, with the 50% Fibonacci of 1.2060 potentially halting the rebound at 1.2060.

In the bigger picture, EURUSD needs to recover back towards the 1.21 level where the 61.8% Fibonacci and 50-day MA have converged if the bullish outlook is to stay intact. Otherwise, the outlook is at risk of turning bearish, and a drop below the March low of 1.1703 would confirm this.

EURUSD

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