- EUR/USD takes offers to refresh intraday low, extends pullback from 17-month high.
- Bearish Doji candlestick, overbought RSI (14) conditions suggest further pullback in Euro prices.
- Previous resistance line from February 2023 restricts short-term downside.
- Bulls need to cross 1.1280 to restore market’s confidence in refreshing multi-month high.
EUR/USD renews its intraday low near 1.1220 while extending the previous day’s pullback from the highest levels since February 2022 during a mid-Asian session on Monday. In doing so, the Euro pair justifies the bearish Doji candlestick, as well as the overbought RSI (14) line, while teasing the sellers.
It’s worth noting that the Doji candlestick gains more attention, as well as appears effective in activating the price reversal, if it is spotted at the multi-month high. Also amplifying the odds of witnessing the pullback in the EUR/USD could be the RSI (14) conditions and a shift in the market sentiment, not to forget the reassessment of the Fed bias.
Also read: EUR/USD eases from multi-month high past 1.1200 as traders reconfirm Fed bias
With this in mind, EUR/USD sellers are likely rushing towards a five-month-old previous resistance line, now support around 1.1160. However, the 1.1200 round figure and a one-week-old rising trend line near 1.1120 are extra filters to watch before welcoming the Euro bears.
It should be noted that April’s high of 1.1095 acts as the final defense of the EUR/USD bulls, a break of which can drag prices toward June’s peak surrounding 1.1010 before highlighting the 100-DMA support of 1.0860.
On the flip side, a daily closing beyond the previous day’s peak of 1.1245 will defy the bearish bias favored by the latest candlestick formation. However, multiple levels marked during early 2022 around 1.1280 will join the overbought RSI line to challenge the EUR/USD bulls afterward.
In a case where the EUR/USD pair remains firmer past 1.1280, the odds of witnessing a run-up towards the February 2022 peak of around 1.1500 can’t be ruled out.
EUR/USD: Daily chart
Trend: Limited downside expected
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