EUR/USD fades late Thursday’s corrective bounce off short-term key support as it retreats to 1.0590 during Friday’s Asian session.

Not only the failure to stay beyond the short-term key support but the RSI (14) line also keeps the pair sellers hopeful by printing the sub-50 level but staying beyond the oversold region.

As a result, the quote is likely to break the aforementioned three-week-old horizontal support line, close to 1.0580.

Following that, a slump toward the previous weekly low near the 1.0500 round figure becomes imminent.

However, a convergence of the 200-SMA and a one-month-long ascending trend line, close to 1.0440, appears a tough nut to crack for the EUR/USD bears afterward.

In a case where the pair sellers manage to keep the reins past 1.0440, the late November swing low near 1.0220 will gain the market’s attention.

On the flip side, a one-week-old descending resistance line, close to 1.0650, guards the EUR/USD pair’s immediate recovery moves.

Also acting as upside filters are multiple hurdles around 1.0660 and 1.0700, a break of which could challenge the monthly high of 1.0736.

The pair faces strong support at around 1.0580, where the Fibonacci 23.6% retracement of the latest uptrend and the 100-period Simple Moving Average (SMA) on the four-hour chart align. Below that level, 1.0530 (Fibonacci 38.2% retracement) could be seen as the next support before 1.0500.

On the upside, the pair could target 1.0680 (end-point of uptrend) and 1.0700 (psychological level) could be tested once EUR/USD rises above 1.0620 (20-period SMA, 50-period SMA) and confirms it as support.

To sum up, EUR/USD holds onto the bearish bias despite the latest inaction around the short-term key support.

EURUSD will gain bullish momentum after a touchdown at EMA100

Dec 23 2022