EURUSD rebounds off 7-week low near uptrend line

EURUSD is battling with the medium-term uptrend line as the market sank towards a new seven-week low of 1.0530 on Monday. The 20- and 50-day simple moving averages (SMAs) confirmed the recent negative move as they posted a bearish crossover. The MACD is extending its bearish structure beneath its trigger and zero lines, while the RSI is pointing down in the negative region.

Further losses should see the seven-week low of 1.0530 acting as a major support ahead of the 1.0480 barrier and the 38.2% Fibonacci retracement level of the up leg from 0.9535 to 1.1030 at 1.0460. A drop below this level would reinforce the bearish structure and open the way towards the next key level of the 200-day SMA at 1.0330.

In the event of an upside reversal, the 23.6% Fibonacci retracement at 1.0680 could act as a barrier before being able to re-challenge the bearish cross of the SMAs at 1.0725. A break above this line would shift the outlook to a more neutral one, meeting 1.0800 and the 1.1030 peak. More gains could add optimism for more bullish movements towards 1.1180.

All in all, EURUSD posted a bearish wave from the 1.1030 peak but if there is a daily close beneath the uptrend line again, this may open the way for more losses.

About the author

Melina Deltas

Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups. Her technically focused method looks mainly at price action across multiple time frames to capture big moves that develop over the years. She has more than 3 years of experience in analyzing financial markets, specializing in forex, indices, and commodities. Melina studied Pure Mathematics at Lancaster University and has a Master's Degree in Monetary and Financial Economics from the University of Cyprus. Currently, she is an associate member of the Society of Technical Analysts (STA) and a Certified Financial Technician (CFTe).