EUR/USD at risk of drop toward 1.0550

Key highlights

• EUR/USD extended losses and traded below 1.0650.
• A key bearish trend line is forming with resistance near 1.0700 on the 4-hour chart.

EUR/USD technical analysis

Looking at the 4-hour chart, the pair settled below the 1.0700 level, the 100 simple moving average (red, 4 hours), and the 200 simple moving average (green, 4 hours).

A new multi-week low was formed near 1.0614 and the pair is now consolidating losses. It is now facing resistance near the 1.0675 level. It is close to the 50% Fib retracement level of the recent decline from the 1.0737 swing high to the 1.0614 low.

The next major resistance is near the 1.0700 zone. There is also a key bearish trend line forming with resistance near 1.0700 on the same chart.

A close above 1.0700 could start a steady increase toward 1.0750. Any more gains might send EUR/USD toward the 1.0820 resistance. On the downside, initial support is near the 1.0610 level. The next key support is seen near the 1.0550 level, below which it could test 1.0500.

If there is a move below 1.0500, the pair could dive toward 1.0440. Any more losses might send the pair toward the 1.0350 level.