EUR/USD extends recovery toward 1.0850

EURUSD held below the 50% retracement at 1.0840 but rebounded from the 1.0694/1.0981 rally’s 61.8% Fibonacci retracement at 1.0803. Technical indicators on the daily chart indicate that the risk is still tilted to the negative as the pair continues to decline below each of its key moving averages. Simultaneously, technical indicators have slowed down but have consolidated inside negative levels, indicating a lack of enthusiasm among buyers.

The short-term outlook is fairly comparable. On the 4-hour chart, the 20 Simple Moving Average (SMA) is moving southward and above the present level, while EUR/USD develops below its moving averages. The significance of the 1.0840 zone is further supported by the 200 SMA’s convergence with the previously indicated Fibonacci resistance.