- EUR/USD’s bounce has stalled near the 50-hour average resistance.
- Technical charts are signaling scope for a re-test of support at 1.11.
EUR/USD continues to trade in a sideways manner just below the 50-hour moving average (MA) at 1.1145, having defended the psychological support of 1.11 during Tuesday’s US trading hours.
Despite the bounce, the bearish divergence of the 4-hour chart relative strength index confirmed earlier this week is still intact. Alongside that, Wednesday’s bearish inside day candle is signaling buyer exhaustion.
The pair could re-test the psychological support at 1.11 on Thursday. That level is currently housing the 200-day average, which is widely considered a barometer of long-term market trends and often attracts buying or selling pressure depending on the direction in which it is breached.
So, if the bulls fail to defend the 200-day average, a bigger decline may be seen.
However, if the ascending 5-day average at 1.1120 holds ground, buyers will likely step in, lifting the pair to 1.12.
Trend: Pullback likely