EURUSD has been trending lower inside a descending channel on the 4-hour time frame, with the pair recently testing the channel bottom near the 1.1480 swing low before staging a modest recovery.
Price is currently hovering around 1.1518, attempting to claw back some ground while still well within the confines of the bearish formation. The Fibonacci retracement tool drawn from the recent swing high to swing low highlights several levels where sellers could be waiting to re-engage.
The 38.2% Fib sits at 1.1536, which nearly overlaps with the 50% level at 1.1553 in a tight cluster that could act as a formidable resistance zone on any corrective bounce. A larger pullback could reach the 61.8% Fib at 1.1571, which also aligns with the descending channel’s upper boundary and a prior area of congestion.
If any of these levels attract sellers, EURUSD could resume the slide back toward the channel bottom or the 1.1480 swing low.
On the moving averages front, the 100 SMA (blue) has crossed below the 200 SMA (red), confirming that the path of least resistance remains to the downside. Both indicators are sitting comfortably above current price, reinforcing their role as dynamic resistance on any corrective moves higher.
Stochastic has turned higher from the lower end of its range, suggesting that a short-term corrective bounce is already underway. The oscillator has room to climb toward the overbought area, which could keep the pullback going toward the Fibonacci resistance levels before sellers take the wheel again.
RSI, meanwhile, is also angling upward from near the oversold zone and hasn’t yet reached the midpoint, so there could be enough bullish momentum to carry EURUSD into the Fib cluster before the broader downtrend reasserts itself.
Hawkish Fed commentary during the FOMC decision renewed dollar demand and risk aversion, weighing on EURUSD, though the latest ECB rate could keep near-term losses in check.
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