- EUR / USD meets daily support, bulls are looking for a recovery to at least the 38.2% Fibonacci retracement.
- The US dollar extends the upward correction from monthly support.
The pair EUR / USD has extended the decline earlier this week as the US dollar continues to rebound from the nearly 3-year low reached last week as US yields soar.
He DXY index is in its fourth consecutive day of gains, climbing around 0.36% at the time of writing, with the price in the monthly support zone:
Meanwhile, EUR / USD is potentially overextended to daily support territory and an upward correction may be necessary before a further decline.
Below is a technical analysis on the daily chart:
The formation after the bearish engulfing candle has been confirmed with the latest break below the 10-day moving average and support of the dynamic trend line.
Daily support could lead to an upward correction to test the 10-day SMA to at least the 38.2% retracement of Fibonacci.
If the correction occurs towards the resistance zone, then a new move to the downside could leave a shoulder-head-shoulder pattern as follows:
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