Defends the critical daily support line amid light trades

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  • EUR / USD found support near the 1.1540 price area.
  • 21-DMA could jeopardize the path of recovery for EUR buyers.
  • EUR sellers continue to aim for annual lows at 1.1524.

EUR / USD Seeks to extend its rebound from its two-week low at 1.1535, as the US dollar reverses Friday’s massive rally amid improving market mood.

The greenback rallied sharply on Friday, as Fed rate hike expectations escalated amid mounting price pressures in the United States, as the US PCE price index showed. End-of-month dollar buys were also bad news for the major.

Meanwhile, the accommodating ECB and mixed macroeconomic news from the eurozone weighed negatively on the euro. Attention now turns to US ISM manufacturing PMI data and the sentiment on Wall Street of further trade momentum. Note that most of the major European markets are closed on public holidays.

Looking at EUR / USD daily graphic, price bounces off the uptrend line support, connecting the annual lows of 1.1524 and Friday’s low of 1.1535, at 1.1538.

If the momentum for the rally picks up, then the 21-day horizontal moving average (DMA) at 1.1597.

Higher, the psychological barrier of 1.1650 will come into play.

The 14-day Relative Strength Index (RSI) rises slightly towards the midline, currently at 42.93, suggesting the decline remains intact as the leading indicator remains below the centerline of 50.00 .

EUR / USD: Daily chart

Alternatively, a daily close below the aforementioned support line will threaten the 2021 low at 1.1524.

The next stop for EUR sellers is seen at the 1.1500 round figure. As sales resurge, July 2020 levels around the mid-1.1400s will be tested.

EUR / USD: additional levels to consider


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