FOREX

EURUSD Negative Signals Increase Downside Dangers

EURUSD has come under intensifying negative stresses, which may see selling threats materialize. Even though the price had found a foothold on the 100-period simple moving average (SMA), the lower bound of the Ichimoku cloud at 1.1268 has capped upside moves – the level being the 23.6% Fibonacci retracement of the up leg from 1.0773 to 1.1421.

The convergence in the rising 100-period SMA and the slipping 50-period SMA, plus the stall in the negatively charged Ichimoku lines could force the price to edge sideways for a while. That said signs of growing negative momentum exist in the short-term oscillators. The MACD holds below its red signal line in the negative zone, while the RSI dips lower in bearish territory. Furthermore, the stochastics improving picture looks to be turning negative as the % K turns back down.

In the event sellers push below the 100-period SMA at 1.1228, the region from 1.1194 – 1.1206 may apply initial strengthened support. Plunging below this border could then target the 1.1153 important obstacle. If further losses unfold, the 50.0% Fibo of 1.1097 and the trough of 1.1080 may push efforts to bring the decline to a stop.

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If buyers re-emerge and push above the 23.6% Fibo of 1.1268, they could face early resistance from the blue Kijun-sen line until the 50-period SMA, just above the 1.1293 high. Overcoming these constraints, the upper surface of the cloud – coinciding with the 1.1353 peak – could provide a key border to conquer. Next, a successful climb above the 1.1400 and 1.1421 tops could meet the 1.1484 and 1.1514 marks from March 2020 and January 219, respectively.

In brief, the short-term bias remains neutral-to-bullish above 1.1194 and a break above 1.1421 would be required to revive the hike in the pair.

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