EURUSD on Course to Reach Channel’s Bottom

#OPINIONLEADER#

EURUSD plummeted to a new twenty-year low of 0.9547 early on Monday after its most devastating week since the pandemic, with the focus now shifting to the bottom of the 2022 bearish channel at 0.9480.

The price managed to recoup some losses and return above the 0.9600 level over the past couple of hours, as the RSI and the stochastics hinted at oversold conditions. Although some recovery would not be surprising after an ugly sell-off, the technical indicators haven’t exited the bearish area yet, making additional losses possible in the short term.

If the bears worsen the outlook below the channel, the price may initially get congested somewhere between 0.9400 and 0.9335, taken from June 2002. Slightly lower, the 0.9270 area was a tough barrier to upside movements in September 2001, and it overlaps with the extension of the tentative descending line from October 2019. Therefore, it may attract special attention ahead of the 0.9190 handle.

On the upside, the 0.9709 level came to limit bullish pressures today, but above that, there is a more challenging territory at 0.9830 – 0.9850, which the bulls need to claim first before they revisit the 20-day SMA at 0.9940. Reaching parity will be the next target, while higher, buyers will be eagerly looking for a decisive break above the 50-day SMA and the channel at 1.0067 to stage an exciting rally towards September’s high of 1.0197.

All in all, the negative trend in EURUSD remains constant and irreversible for now, bringing the channel’s lower boundary at 0.9480 next on the radar.