The EUR/USD currency pair is showing signs of returning to a bearish trend as it continues to be influenced by a descending channel pattern. Currently, the nine-day Exponential Moving Average (EMA) is positioned below the 14-day EMA, reinforcing the negative outlook for the pair. The recent trading activity indicates that EUR/USD retraced some gains during the Asian session on Tuesday, hovering around the 1.0810 level. Notably, the psychological support level of 1.0800 aligns with the upper boundary of the descending channel, making it a significant level to watch.
An analysis of the daily chart reveals that the pair is testing the upper boundary of the descending channel, which could confirm the anticipated continuing bearish momentum. The 14-day Relative Strength Index (RSI) currently sits just above the 30 threshold. A decline below this level could signify an oversold condition, raising the potential for a corrective rebound in the near future.
As the short-term price dynamics suggest ongoing downward pressure, the immediate support remains critical at the 1.0800 psychological level. Should the price drop back into the descending channel, it may accelerate declines toward the next significant psychological point at 1.0600. A breach of the 1.0600 level could further intensify selling activity, potentially dragging the EUR/USD pair down to the estimated lower boundary of the channel at approximately 1.0680.
On the resistance side, the pair may face challenges at the nine-day EMA situated around 1.0826, with further resistance anticipated at the 14-day EMA near 1.0855. Successfully breaking through these resistance levels could open the path for the EUR/USD to target the psychological milestone of 1.0900. Overall, market participants should closely monitor these levels as they navigate the current market landscape.
