The EUR/USD pair seems set to fall below the 1.1900 level during the Asian session on Friday, potentially drawing in more sellers, especially after the mixed price movements observed the day before. Currently, the pair has bounced back about 25 pips from its low for the day, trading in the 1.1920 to 1.1925 range, which is down by 0.35% for the day.
The US dollar is attempting to gain some momentum for recovery after hitting a four-year low earlier this week. On the other hand, the European Central Bank (ECB) has expressed rising unease regarding the euro’s rapid gains against the dollar, adding more pressure on the EUR/USD pair.
From a technical standpoint, a bearish movement falling below the 100-hour simple moving average could signal a deeper downturn for the EUR/USD. But, the pair has shown some resilience beneath that 1.1900 level, bouncing back from the 38.2% Fibonacci retracement point stemming from last week’s monthly swing low.
The Moving Average Convergence Divergence (MACD) is currently in negative territory, with the line positioned below the signal line and a small negative histogram hinting that upward momentum is losing steam. The Relative Strength Index (RSI) rests at 42, suggesting a fairly solid trend, which means caution is advised before assuming further declines for the EUR/USD pair.
The 38.2% Fibonacci retracement offers initial support at 1.1892, with a further drop risking even larger pullbacks below the 50% retracement at 1.1832. If there’s a recovery, the pair might aim for the 23.6% retracement at 1.1967, though breaking below initial support could widen the pullback from earlier highs around 1.2080-1.2085, the highest the pair has reached since June 2021.
