EUR/USD grinds lower after reversing from fortnight-old resistance line. Bears need validation from 0.9800 to retake control. Sluggish oscillators suggest further grinding of prices around the key technical levels. EUR/USD stays defensive around 0.9840-50, following a reversal from the two-week high, as bears struggle near the 200-SMA and a six-week-old resistance line during early Monday morning in Europe.
The major currency pair took a U-turn from a fortnight-long resistance line earlier in Asia. However, a convergence of the aforementioned key SMA and the trend line restricts the quote’s further downside. Given the sluggish MACD and RSI (14), coupled with the stated technical confluence around 0.9845-50, the EUR/USD pair is likely to remain sidelined.
That said, a one-week-old horizontal support line near 0.9800 adds to the downside filters while the upward-sloping trend line from October 07, close to 0.9905 by the press time, challenges the short-term buyers. Should the quote crosses the 0.9905 hurdle, a run-up toward the monthly high near the parity level can’t be ruled out.
Alternatively, pullback moves may aim for the monthly horizontal support area surrounding 0.9680-70 before challenging the yearly low of 0.9535. Overall, EUR/USD remains sidelined between 0.9905 and 0.9800 as the pair traders await the European Central Bank (ECB) monetary policy meeting and the US Gross Domestic Product for the third quarter (Q3). Also read: EUR/USD drops towards 0.9800 as market’s anxiety propels DXY, focus on ECB, US GDP
