- The EUR/USD pair is testing the upper boundary as it attempts to re-enter the descending channel pattern.
- Should the 14-day Relative Strength Index (RSI) drop below the 30 level, this would indicate an oversold condition in the market.
- A successful return to the descending channel could drive the pair toward the region near the channel's lower boundary at approximately 1.0670.
The EUR/USD pair has edged lower for the second consecutive day, currently trading around 1.0780 during the Asian session on Monday. An examination of the daily chart reveals that the pair is testing the upper boundary in an effort to re-enter the descending channel pattern, which could reinforce a bearish sentiment for the pair.
The 14-day Relative Strength Index (RSI), a key momentum indicator, sits slightly above the 30 level. If it falls below this threshold, it would signal an oversold condition, hinting at the potential for an upward correction in the EUR/USD pair in the near term.
On the downside, immediate support appears at the upper boundary of the descending channel, located around the 1.0770 level. A return to this descending channel could exert downward pressure on the pair, potentially guiding it toward the psychological level of 1.0600.
If the pair breaks below the 1.0600 psychological level, it could trigger increased selling pressure, leading to a test of the lower boundary of the descending channel near the 1.0670 mark.
In terms of resistance, the EUR/USD pair may face an immediate barrier at the nine-day Exponential Moving Average (EMA) situated at 1.0826, followed by the psychological level of 1.0900.
EUR/USD: Daily Chart
