EUR/USD Consolidates Above Level 1.1250 as Pair Looks Oversold

EUR/USD Significant Levels
Resistance Levels: 1.1800, 1.2000, and 1.2200
Support Levels: 1.1300, 1.1200 and 1.1100

EUR/USD Price Long-term Trend: Bearish
EUR/USD has been in a downtrend since June as pair looks oversold. Buyers have pushed the currency pair to its peak price of level 1.2200 on December 14, 2020. The pair dropped to level 1.1704 because the market reached an overbought region. EUR/USD resumed a fresh uptrend and retested the previous peak price. This resulted in the formation of a bearish double top. This bearish pattern is responsible for the current downtrend. Today, the pair has fallen to level 1.1278 as the market reaches the oversold region. Meanwhile, on the August 16 downtrend; a retraced candle body tested the 61.8% Fibonacci retracement. The retracement indicates that EUR/USD is likely to fall to level 1.618 Fibonacci extension or level 1.1320. From the price action, the pair is consolidating above the Fibonacci level.

Daily Chart Indicators Reading as Pair Looks Oversold:
EUR/USD has fallen to level 29 of the Relative Strength Index for period 14. The implication is that selling pressure has reached bearish exhaustion. There is a likelihood of a trend reversal. That is, buyers are likely to emerge in the oversold region of the market. The 21-day SMA and the 50-day SMA are sloping southward indicating the downtrend.

EUR/USD Medium-term Trend: Bearish
On the Daily chart, the currency price is making a series of lower highs and lower lowers. The pair made a lower low of 1.1180 and pulled back. Meanwhile, on August 19 downtrend; a retraced candle body tested the 61.8% Fibonacci retracement. The retracement indicates that EUR/USD is likely to fall to level 1.618 Fibonacci extension or level 1.1305.

4-hour Chart Indicators Reading
The pair is below the 20% range of the daily stochastic. The Pound is in the oversold region. The 21-day and 50-day SMAs are sloping downward indicating the downtrend. The market is below the 50% range of the daily stochastic. It is in a bearish momentum.

General Outlook for EUR/USD
EUR/USD has reached the oversold region of the market as pair looks oversold. Since November 15, the pair has been consolidating above level 1.1250. The uptrend will resume is the current support holds.


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