EUR/USD Price Analysis: Near 2-month low, bears are in control below 200-day SMA

  • EUR/USD faces further selling on Tuesday and is weighed down by a modest rally in the USD.
  • The technical setup suggests that the path of least resistance is to the downside.
  • Recovery attempts could be seen as a selling opportunity and are likely to remain limited.

EUR/USD fails to take advantage of the previous day’s modest gains and attracts new sellers near the round 1.0800 level during the Asian session on Tuesday. The pair remains very close to lows in more than two months, around the 1.0765 area touched in July, and looks vulnerable below the technically significant 200-day SMA.

The negative outlook for the EUR/USD pair is reinforced by the fact that the oscillators on the daily chart remain in bearish territory and are still far from the oversold zone. That aside, the appearance of some buying around the US dollar (USD) suggests that the path of least resistance for the pair is to the downside. Therefore, a further drop to the 1.0765 area, on the way to the 1.0700 level, looks like a clear possibility.

The next relevant support is near the bottom around 1.0635. Next is the 1.0600 zone, which if broken decisively will become another trigger for the bears and pave the way for further losses. The EUR/USD pair could then become vulnerable and accelerate the decline towards the intermediate support of 1.0530-1.0525 before finally falling to the psychological level of 1.0500.

On the other hand, the rally above the 1.0800 level is likely to face stiff resistance near the 200-day SMA, currently around the 1.0815-1.0820 region. Sustained strength above this region could trigger a short-covering rally and allow the EUR/USD pair to recapture the 1.0900 level. However, any further move higher could be seen as a selling opportunity and remain capped near last week’s high around the 1.0840-1.0845 zone.

The latter should act as a turning point for EUR/USD, which if broken strongly will suggest that the recent sharp pullback from the 1.1275 area, or a 17-month high hit in July, has come to an end. This, in turn, will set the stage for some significant appreciation in the near term.

EUR/USD daily chart

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EUR/USD additional technical levels

EUR/USD

Overview
Last price today 1.0784
Today Daily Variation -0.0011
today’s daily variation -0.10
today’s daily opening 1.0795
Trends
daily SMA20 1.0877
daily SMA50 1.0966
daily SMA100 1.0921
daily SMA200 1.0818
levels
previous daily high 1.0809
previous daily low 1.0772
Previous Weekly High 1.0946
previous weekly low 1.0772
Previous Monthly High 1.1065
Previous monthly minimum 1.0766
Fibonacci daily 38.2 1.0795
Fibonacci 61.8% daily 1.0786
Daily Pivot Point S1 1.0775
Daily Pivot Point S2 1.0755
Daily Pivot Point S3 1.0738
Daily Pivot Point R1 1.0812
Daily Pivot Point R2 1.0829
Daily Pivot Point R3 1.0849

Source: Fx Street

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