- The explosion of the Darva Box chart formation will unbalance the asset.
- Falling 20 and 50 period EMAs affirm that the decline is intact.
- The RSI (14) is on the verge of falling below 40.00.
EUR/USD opened almost flat at 1.0806 and rose to 1.0815 but responding sellers dragged the pair below the opening price to a low of 1.0772. The pair has been trading lower for the past few trading sessions after failing to hold above the psychological resistance at 1.0900 last week.
On a four-hour timeframe, the asset is forming a Darvas Box chart pattern, which is plotted in a range of 1.0763-1.0940. A breakout of the Darvas Box chart pattern will result in expanding volumes and volatility.
The 20 and 50 period EMAs at 1.0812 and 1.0832 respectively continue to scale lower, indicating that the bearish bias is intact.
Meanwhile, the Relative Strength Index (RSI) (14) is about to drop below 40.00, which will bring a new bearish impulsive wave.
A decline below the monthly lows at 1.0758 will drag the asset towards the March 24, 2020 low at 1.0721, followed by a two-year low at 1.0639.
Conversely, Euro bulls can dictate the asset if it breaks above the 150 EMA at 1.0908. This will send the pair towards the March 22nd and 31st highs at 1.1046 and 1.1185 respectively.
EUR/USD four-hour chart
EUR/USD Technical Levels
Source: Fx Street
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