The EUR/USD pair briefly traded above the 61.8% Fibonacci retracement of the 1.0197/0.0535 slide at 0.9945, but it is finishing the week below the 38.2% retracement at 0.9790, which suggests the corrective advance could be over. The pair may well retest and even break below the lower end of the range in the upcoming days.

The weekly chart shows that the pair also faltered just ahead of the daily descending trend line from the year high at 1.1494, which further supports a bearish continuation in the foreseeable future. The 20 SMA maintains a firmly downward slope above the trend line and far below the longer ones. Technical indicators, in the meantime, continue lacking directional strength near oversold readings.

On a daily basis, the risk is skewed to the downside. The pair trades below all of its moving averages, which keep heading south. Technical indicators, in the meantime, resume their declines within negative levels after failing to surpass their midlines.

The 23.6% retracement of the aforementioned daily slump provides immediate support at around 0.9690. The next level to watch is the 0.9600 figure, ahead of the multi-year low of 0.9535.

Sellers will now likely wait at around 0.9870 and 0.9945 ahead of parity. Even if the pair recovers above the latter, it would need to clear the trend line at around 1.0050 to avoid the risk of collapsing.

EUR/USD will likely remain under selling pressure in the following weeks. Bears are a majority in all the time frames under study. On average, the pair is seen stable in the 0.97 area from now until year-end.

The Overview chart paints a gloomy picture for the EUR. The three moving averages head lower, resuming their declines and reaching fresh yearly lows. More relevantly, the monthly and quarterly views show that an increased number of market participants are now foreseeing lower lows for the year sub-0.9500, with potential slides down to 0.9000.

EURUSD Third Leg Correction Expected of Temporary Gains

Oct 09 2022