EURUSD has exhibited renewed weakness, extending its recent decline. This analysis examines the technical situation and explores potential scenarios for the currency pair.
EURUSD Slides Further:
- Downtrend Extension: EURUSD has extended its downside move from 1.0981, reaching a new low of 1.0622. This move reinforces the ongoing downtrend.
Downside Potential Persists:
- Further Decline Possible: Even after this decline, there’s still a possibility of further weakness. After a minor consolidation phase, the next potential target zone to watch could be around 1.0550.
Signs of a Correction?
Initial Resistance to Consider:
- 1.0670 Initial Resistance: While the immediate outlook remains bearish, there are potential signs of a correction within the downtrend. A break above the initial resistance level at 1.0670 could indicate such a correction.
Upside Scenario if Resistance Breaks:
- 1.0700 Resistance: If the price breaks above 1.0670, the pair could encounter resistance around 1.0700.
- Falling Trend Line Resistance: Overcoming 1.0700 resistance could trigger a more significant upside move, potentially reaching the falling trend line on the 4-hour chart. This move would suggest a more substantial correction or even a potential trend reversal.
Overall Sentiment:
The technical outlook for EURUSD remains bearish in the short term. The extension of the downtrend is the dominant theme. However, a break above the initial resistance at 1.0670 could indicate a temporary correction within the downtrend. Close monitoring of price action around this level will be crucial in determining the future direction of EURUSD.