EURUSD extends its current losses to the lowest level since March, which it reached last week.
The EURUSD pair begins the new week on a sour note, oscillating in a narrow trading zone around the mid 1.0600s during the Asian session. Meanwhile, spot prices remain within striking distance of the lowest level since March. Which was reached last Friday, and are vulnerable to continuing the downward trend seen over the last two months or so.
The US Dollar (USD) is nearing a six-month high and remains firmly supported. By increased US Treasury bond rates, boosted by the Federal Reserve’s (Fed) hawkish stance. And the reduction in the projected number of rate cuts in 2024. The common currency, on the other hand, is underpinned. By the European Central Bank’s (ECB) dovish rate decision last Thursday. Which adds to keeping the EURUSD pair under control.
EURUSD Technical Outlook
Technically, the bearish picture is bolstered by the fact. That the decline from the 1.1275 region, or a 17 month high reached in July, has been along a downward sloping channel. This indicates a well established negative trend and shows. That the EURUSD pair’s path of least resistance is to the downside.
Furthermore, ocilator on the daily chart are deeply bearish. Area and are still not in the oversold zone.
As a result, a following decline towards the 1.0600 round figure on the way to the ascending channel support. Which is now located at the 1.0560-1.0555 zone, appears to be a strong possibility. Some follow through selling will signal a new bearish breakdown and lay the way for the EURUSD pair’s two month-old downturn to be extended.
Any rebound over the 1.0670 level, on the other hand, is expected to encounter tough resistance at the 1.0700 level. This is followed by last week’s swing high, which, if forcefully passed, might propel the EURUSD pair towards confronting the 1.0780 obstacle, which represents the upper border of the aforementioned channel. A convincing breakaway, followed by a move beyond. The round number of 1.0800 indicates that spot prices have established a near-term bottom, paving the stage for a substantial near-term advance.
