- EUR / USD clings to the support of the 21-day SMA, the decline looks convincing.
- The RSI is pointing lower below the midline, pointing to further losses for the pair.
- 1.1700 remains a tough nut to crack for the pair’s bulls, with all eyes on the ECB.
EUR / USD remains stable around 1.1600, devoid of any upside potential amid a vastly stronger US dollar.
The USD resumes its recovery rally on Monday, as US Treasury yields stop their latest corrective pullback.
Mixed market sentiment, driven by mounting inflation fears, strong US corporate earnings reports and progressing US stimulus, sustains the dollar’s safe-haven appeal.
The pair now awaits Thursday’s European Central Bank (ECB) monetary policy decision to break out of the recent price range of 1.1570-1.1670.
Meanwhile, divergent monetary policy prospects between the Fed and the ECB could continue to weigh on the euro.
Looking at the EUR / USD daily chart, the bulls have been defending the 21-day moving average at 1.1600 since October 20.
Meanwhile, attempts to the upside are defended by the 1.1670 supply zone.
Now, with the 14-day RSI pointing lower below the midline, the pair is likely to extend Monday’s sell-off towards the prior week’s low of 1.1571.
If this last level breaks, then the doors will open for a visit to the yearly lows of 1.1524.
EUR / USD daily chart
On the other hand, the bulls are expecting acceptance above the recent range highs near 1.1670, above which the 1.1700 level will come into play, where the is the slightly bearish sloping 50 SMA.
The next stop for buyers of the EUR / USD pair is seen at the psychological level of 1.1750.
EUR / USD additional levels