Technical Reversal: Euro On The Downside
The EURUSD currency pair on the daily chart has been in a downtrend since 6 January 2021 when it registered the high price at 1.23485, followed by a series of lower tops and lower bottoms.
Recent Price Action
On 4 February 2021, the EURUSD currency pair recorded the low price of 1.20012.
When applying Oscillator Analysis to the price chart, one can see that price is trading below the SMA 60 period Moving Average line, a fact which confirms the Euro’s downward direction.
The Moving Average/Convergence Divergence (MACD) Oscillator is recording values below the zero-line which hints to the bearish bias of financial instrument.
RSI and Fibonacci
Additionally, the Relative Strength Index (RSI) Oscillator registers values below the fifty line which indicates negative sentiment.
All three technical indicators agree with regards to the downward bias of the pair.
Three price targets may be calculated upon applying the Fibonacci tool to the price chart:
- The first price target is estimated at 1.19689 (161.8%).
- The second at 1.18331 (261.8%).
- The third price target is projected at 1.16134 (423.6%).
The Euro is currently trading below the downtrend line.
The RSI and MACD (Moving Average Convergence/Divergence) Oscillators and price display a negative divergence which could push prices lower if supply is greater than demand.
The presence of the Bearish Evening Star pattern hints at a potential rally to the downside.
Its current price is 1.1% below the last week’s close after a sharp decline in price during a period of heavy selling. Of course, supply and demand, as well as the crowd sentiment, will determine the future course of Euro.
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