The EUR/USD currency pair is currently attempting to test the upper limit of a descending channel as it trades around the 1.0780 level during the Asian session on Monday. This marks a continuation of a downtrend observed over the past two days. Analysts note that a successful re-entry into this channel could further strengthen the bearish sentiment surrounding the pair.
The Relative Strength Index (RSI), a widely used momentum gauge, remains just above the critical level of 30. A decline below this level could indicate that the currency pair is oversold, potentially setting the stage for a corrective rally in the near term. Traders will be keeping a close eye on these momentum signals as they could influence short-term trading strategies.
Support levels for the EUR/USD pair appear to be forming at the upper boundary of the channel located at around 1.0770. If the pair returns to the descending channel, it could experience downward pressure, particularly near the psychological level of 1.0600. A breach of this support could heighten selling activities and result in the pair testing the lower boundary of the channel, which is situated at approximately 1.0670.
On the resistance front, the pair may face challenges around the nine-day Exponential Moving Average (EMA), currently set at 1.0826. Further resistance is anticipated near the significant psychological level of 1.0900. These levels will be crucial for traders as they navigate the current market conditions, assessing the potential for either a rebound or further declines in the value of the EURO against the US Dollar.
