EUR/USD Price Analysis: Reverses from monthly resistance line as bears approach 0.9800
- EUR/USD takes offers to extend pullback from a two-week high.
- Steady RSI, failure to cross immediate hurdle direct sellers towards 21-DMA support.
- Bulls remain off the table unless crossing a descending resistance line from June.
EUR/USD sellers return to the desk in early Wednesday in Europe, after a two-day absence. As a result, the quote takes a U-turn from a downward-sloping trend line from mid-September.
Given the steady RSI and the pair’s multiple failures to cross the immediate resistance line, around 0.9870 by the press time, EUR/USD is likely to stretch the latest declines towards the 21-DMA support of 0.9775.
However, three-week-old horizontal support near 0.9670-65 appears a tough nut to crack for the bears.
If the EUR/USD bears manage to conquer the 0.9665 support, the odds of witnessing a fresh yearly low, currently around 0.9535, can’t be ruled out.
Alternatively, an upside break of the aforementioned resistance line, near 0.9870, isn’t an open invitation to the EUR/USD bulls as another falling trend line from June, close to 0.9995 at the latest, will challenge the upside momentum.
Also acting as the key hurdle to the north is the 1.0000 parity mark, a break of which will direct prices towards the previous monthly peak near 1.0200.
To sum up, EUR/USD is likely to decline further but the downside room is limited.
EUR/USD: Daily chart
Trend: Further weakness expected