- EUR/USD remains sidelined around monthly top, recently pressured near intraday low.
- RSI conditions, sustained break of five-week-old resistance keep buyers hopeful above 1.0280 short-term key support.
- 61.8% Fibonacci retracement guards immediate recovery, 200-SMA acts as an extra downside filter.
EUR/USD renews intraday low near 1.0315 during Friday Asian session, snapping four-day uptrend around the monthly peak. In doing so, the major currency pair extends the latest pullback from the 61.8% Fibonacci retracement level of its downside move between late June and mid-July.
Although the pullback from an important Fibonacci retracement level suggests further downside of the quote, a convergence of the previous support line from early July and 50% Fibonacci retracement level challenges the bears around 1.0280. Also pushing back the downside bias is the recently firmer RSI.
Even if the EUR/USD pair breaks the 1.0280 support confluence, the 200-SMA level surrounding 1.0220 and a one-month-old upward sloping support line near 1.0190 will challenge the bears.
Following that, a downward trajectory towards the 23.6% Fibonacci retracement level around 1.0110 can’t be ruled out.
Alternatively, recovery moves need validation from the 61.8% Fibonacci retracement level surrounding 1.0365.
Also challenging the EUR/USD bulls is the June 30 swing high of 1.0490, a break of which could propel prices towards a late June peak of 1.0614.
EUR/USD: Four-hour chart
Trend: Limited downside expected