The EUR/USD has seen a decline for four consecutive days, hovering around the 1.1760 mark in Asian trading on Monday. Chart analysis suggests that there’s a waning bullish sentiment as the pair struggles to stay above the lower limit of its ascending channel pattern.
The 14-day Relative Strength Index (RSI) currently sits at 63.92. This is a drop from recent overbought levels, yet it remains constructive as it stays above the midpoint. The RSI is on the rise, signaling that buyers still have the upper hand, even if the overall momentum isn’t quite what it was before.
The 9-day exponential moving average (EMA) is positioned above the 50-day EMA, lending support to the bullish outlook. The EUR/USD remains above both averages, thereby sustaining its short-term upward trend. The moving average setup seems to favor upward movement, with the 9-day EMA acting as dynamic support, while the 50-day EMA backs the overall rally. Staying above the faster EMA will keep the easiest path pointing higher.
If the pair can surpass the psychologically significant level of 1.1800, it could target the three-month peak of 1.1808 reached on December 24. A breakthrough past this resistance zone might pave the way for a climb to 1.1918, which would be the highest point since June 2021, followed by the top of the ascending channel around 1.1930.
On the flip side, immediate support for the EUR/USD pair could be found at the 9-day EMA, currently at 1.1757, aligning with the ascending channel boundary. If it drops below this level, it would likely shatter short-term momentum and test the 50-day EMA at 1.1673. Should the decline continue, we might see a retest of the three-week low of 1.1589, which was noted on December 1.
