EUR/USD Price Analysis: Stays defensive above 1.0600
- EUR/USD holds lower ground after posting the biggest daily loss in a month.
- RSI (14), 200-SMA challenge bears despite downside break of five-week-old horizontal support.
- Bulls need validation from a two-week-old resistance line to retake control.
EUR/USD dribbles around a three-week low near 1.0615-20 as bears take a breather following the biggest daily fall in a month. Even so, the major currency pair remains on the bear’s radar during Friday’s Asian session, with eyes on the US inflation data.
Also read: US CPI Preview: Soft core set to drive dollar down, and two other scenarios
Given the clear downside break of a horizontal support region from early May, now resistance around 1.0630-40, the EUR/USD prices are likely to decline further.
However, RSI (14) remains sidelined around the oversold territory and joins the 200-SMA support near 1.0600 to challenge the pair bears.
Also likely to test the EUR/USD sellers are the multiple supports around 1.0590 and 1.0550, before portraying a south-ruin towards the 1.0460 level comprising May 18 low.
Alternatively, recovery moves above the support-turned-resistance area around 1.0630-40 won’t convince the EUR/USD bulls.
The reason is the presence of the 100-SMA and downward sloping trend line from May-end, respectively around 1.0690 and 1.0735.
EUR/USD: Four-hour chart
Trend: Further weakness expected