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Will the EUR/USD Continue to Fall?

September 13, 2021

  • EUR/USD’s downside correction started above 1.1900.
  • Bullish trend line broken near 1.1840.

The Euro, US Dollar pair was climbing steadily after breaking resistance at 1.1800. The pair moved higher to 1.1850, but struggled to gain momentum, reaching a high near 1.1910 on September 3rd.

EUR/USD 4-Hour Chart (Trend: BEARISH)

On the 4-hour chart, the pair began to correct lower after the high of 1.1909, breaking below support at the 1.1880 and 1.1850 levels. The quote was also able to break below a major bullish trend line with support near 1.1840.

The quote has also broken below the 38.2% Fibonacci retracement level of the upwards move of the swing low of 1.1663 to the swing high of 1.1909.

The pair has moved just below both the 100-MA (red) and 200-MA (blue), and is set to test the 50% Fibonacci retracement level (of the 1.1663 low to the 1.1909 high) at around the 1.1785 level. If support breaks here, bearish momentum could build, driving the quote down lower. The next support level is down near 1.1720.

In contrast, if support holds at the 50% Fibonacci retracement level (of the 1.1663 low to the 1.1909 high), the pair could resume its bullish climb. It will need to overcome resistance near 1.1800 and the 100-MA (red) and 200-MA (blue). A break above here could see the quote climb towards the next resistance level near 1.1850. A successful break above this could see the quote climb back towards the recent high of 1.1900, which could then open the doors for further gains towards the 1.2000 level, last seen on June 17th.

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