Chart of the week – EUR/USD
EUR/USD bearish breakdown from 4-week range
Short-term technical analysis
Source: ALFATRADING-MARKETS
- The EUR/USD has traded lower and wiped out all its recent post ECB’s monetary policy decision day gains on last Fri, 17 December. In addition, it has staged a bearish breakdown from a 4-week “Symmetrical Triangle” range configuration since 24 November 2021 low of 1.1186 on the last 3-hour of last Friday’s US session.
- The 4-hour RSI oscillator continues to evolve in a bearish configuration and still has room to see further potential downside before it reaches an extreme oversold level of 15%. These observations suggest that short-term downside momentum is not overstretched which advocates a further potential drop in price actions at this juncture.
- If the 1.1385 key short-term pivotal resistance (also the highest level seen within the 4-week range configuration) is not surpassed, the EUR/USD may continue its potential impulsive down move towards 1.1145 (the former swing high of 27 March 2020) before a test on 1.1085 next (a cluster of Fibonacci expansion levels).
- On the other hand, a clearance with an hourly close above 1.1385 suggests a failure bearish breakdown and the EUR/USD is likely to see a push up towards its 1.1500/1530 key medium-term pivotal resistance (the former range support from 5 October/5 November 2021 & the descending trendline from 25 May 2021 high).
