- EUR/USD regains positive traction on Monday amid the emergence of fresh USD selling.
- Last week’s breakdown below the 100-period SMA on the H4 warrants caution for bulls.
- Bears might now wait for weakness below the 1.1265 region before placing fresh bets.
The EUR/USD pair attracts some dip-buyers at the start of a new week and climbs back closer to mid-1.1300s during the Asian session amid a broadly weaker US Dollar (USD). The mixed technical setup, however, warrants some caution before positioning for any meaningful recovery from a three-week low, around the 1.1265 region touched last Thursday.
Last week’s breakdown below the 100-period Simple Moving Average (SMA) on the 4-hour chart – for the first time since early April – was seen as a key trigger for bearish traders. Oscillators on the daily chart are holding in bullish territory and have again started gaining positive traction on hourly charts. Hence, some follow-through buying is needed to confirm that the EUR/USD pair’s recent corrective pullback from the 1.1575 area, or the highest level since November 2021 touched last week, has run its course.
In the meantime, the aforementioned support breakpoint, currently pegged near the 1.1375 area, might now act as an immediate hurdle ahead of the 1.1400 round figure. A sustained strength beyond the latter should allow the EUR/USD pair to surpass the 1.1425-1.1430 intermediate barrier and aim toward reclaiming the 1.1500 psychological mark. The momentum could extend further towards challenging the multi-year peak, around the 1.1575 region touched on April 2021 en route to the 1.0600 mark.
On the flip side, acceptance below the 1.1300 mark, leading to a subsequent break through the 1.1270-1.1265 region, or the multi-week low touched last Thursday, will reaffirm the negative bias. The EUR/USD pair might then accelerate the fall towards the 1.1200 round figure en route to the 1.1160-1.1155 area. The next relevant support is pegged near the 200-period SMA on the 4-hour chart, around the 1.1125 zone, which if broken decisively should pave the way for a further near-term depreciating move.
EUR/USD 4-hour chart
