- EUR/USD bears are testing before showing their full strength.
- The falling 20 and 50 EMAs add to the bearish filters.
- A slide below 0.9540 will steer the bears towards a fresh 2-decade low.
The EUR/USD pair is hovering around the critical support at 0.9540, which is a new two-decade low set on Monday. In the Asian session, the pair has pulled back firmly after attempting to cross the 0.9600 round level barrier. The pair is testing a breakout level, so increased volatility in the market cannot be ruled out.
In the 1 hour chart, the pair’s bulls are testing around 0.9540 and subsequent selling pressure will send the pair on a negative track. Also, the downtrend line from Tuesday’s high at 0.9671 will be a major resistance.
The 20 and 50 period EMAs at 0.9583 and 0.9622 respectively are sloping down adding to the bearish filters.
Also, the RSI (14) is hovering in a bearish 20-40 range, indicating more weakness ahead.
If the pair falls below the daily low at 0.9542, the dollar bulls will drag the pair towards the June 2002 low at 0.9313, followed by the October 2001 high at 0.9241.
Investors could bet against it if the pair breaks above Tuesday’s high around 0.9670, which will take EUR/USD towards Friday’s high of 0.9852. A break of the latter will send the pair towards the round level resistance at 0.9900.
EUR/USD 1 hour chart
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Source: Fx Street
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