The EUR/USD pair plummeted during the European session to a fresh one-month low of 1.0813, holding nearby as American traders arrive at their desks. The US Dollar appreciated as the risk-off mood persists, despite encouraging news from the United States (US) about the debt ceiling extension. Late on Tuesday, President Joe Biden and top lawmakers met to discuss an agreement and said a deal could be reached by the end of the week.

The EUR/USD pair trades near the aforementioned low, and the daily chart hints at further slides ahead. The pair moved further below a bearish 20 Simple Moving Average (SMA), which stands at around 1.0970. At the same time, the pair approaches a mildly bullish 100 SMA at 1.0805. A break below the latter should exacerbate selling interest. Finally, technical indicators head firmly south within negative levels, anticipating another leg lower. The 1.0800 area appears supported by the temporary 100-day Simple Moving Average (SMA) at 1.0804 and the loss of this level could trigger a deeper drop to, initially, the April 3 low at 1.0788. Further south emerges the March 15 bottom of 1.0516.

Looking at the longer run, the constructive view remains unchanged while above the 200-day SMA, today at 1.0460.

In the near term, and according to the 4-hour chart, the risk also skews to the downside. A bearish 20 SMA rejects recovery attempts while accelerating its decline well below the longer ones. The Momentum indicator heads lower within negative levels, while the Relative Strength Index (RSI) partially lost its downward strength but holds at around 28. The main bearish target on further declines is 1.0745, the 61.8% Fibonacci retracement of the 2022 yearly slump.

EURUSD has turned favors to bearish trend

May 17 2023