- EUR/USD grinds near monthly low after posting a bullish candlestick on daily formation.
- Bullish moving average crossover, steady RSI adds strength to the upside bias.
- Three-month-old previous support line holds the key to Euro bull’s conviction.
EUR/USD stays defensive near 1.0730 during inactive early trading hours of Wednesday, following a bounce off monthly low to post the bullish Doji candlestick on Tuesday. In doing so, the major currency pair justifies the steady RSI (14) while also keeping the previous day’s bounce off the 50-DMA support.
It should be noted that the 100-DMA pierced the 200-DMA from below and portrayed a “Golden cross” during the last week, which in turn back the latest upside bias.
However, the recovery remains elusive unless the EUR/USD pair stays below the previous support line from early November 2022, around 1.0860.
Following that, a run-up towards refreshing the monthly peak, currently near 1.1035, can’t be ruled out. Though, the 1.0900 and the 1.1000 round figures may act as intermediate halts during the expected rally.
Meanwhile, a daily closing beneath the 50-DMA, around 1.0700 by the press time, could reject the bullish bias while sustained trading below the previous day’s low of 1.0669 will defy the upbeat signals sent via the Doji candlestick.
In that case, a downward trajectory toward the previous monthly low of 1.0483 can’t be ruled out.
However, the 100-DMA and the 200-DMA, respectively around 1.0345 and 1.0320, could challenge the EUR/USD bears afterward.
EUR/USD: Daily chart
Trend: Further recovery expected