February 8, 2023

Bulls struggle below 1.0940 hurdle

  • EUR/USD struggles after six-day uptrend, seesaws near nine-month high.
  • Overbought RSI conditions join six-week-old resistance line to challenge further upside.
  • Bears need validation from the 10-DMA to retake control.

EUR/USD bounces off intraday low to around 1.0920 as it consolidates weekly gains, the third one in a row, ahead of the US fourth quarter (Q4) Gross Domestic Product (GDP) on Thursday.

The major currency pair justifies the overbought RSI (14) as it prints the first daily loss in seven days.

Not only the Relative Strength Index (RSI) conditions but the ascending trend line from mid-December, near 1.0940 by the press time, also challenges the EUR/USD buyers.

With this, the pair is likely to decline towards the 10-DMA support, close to 1.0850 at the latest. However, any further downside needs to conquer the previous monthly low surrounding 1.0735 to welcome the EUR/USD bears.

Following that, a downward trajectory towards the monthly low near 1.0485 can’t be ruled out.

Meanwhile, an upside break of the aforementioned six-week-long resistance line, around 1.0940, could quickly propel EUR/USD towards the 1.1000 round figure.

Even so, another ascending trend line resistance, from November 15, 2022, could challenge the EUR/USD buyers afterward around 1.1090. It’s worth mentioning that the top marked during late March of the last year, near 1.1185, could jump on the bull’s radar past 1.1090.

To sum up, EUR/USD bulls are likely to take a breather as traders braces for the key data/events. However, the bears are far from the entry.

EUR/USD: Daily chart

Trend: Limited upside expected

 

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