EURUSD Testing Support Turned Resistance Near 1.1700 And Fib Levels

EURUSD has broken below a key support zone and has been trending sharply lower since mid-May, with a steep descending trend line guiding the selloff from the swing high at 1.1789.

Price has since found a floor near the 0% Fibonacci level at 1.1611 and is now attempting a corrective bounce, likely drawing sellers back into the market at higher levels.

The Fibonacci retracement tool shows where bears could be waiting to re-enter the downtrend. The 38.2% Fib is at 1.1679, which coincides with a former support area that could now flip to resistance.

A deeper retracement could reach the 50% level at the 1.1700 major psychological mark, while a larger correction might extend toward the 61.8% Fib at 1.1721, which aligns closely with the 200 SMA dynamic resistance. That could be the line in the sand for a bearish pullback.

The 100 SMA has crossed below the 200 SMA to confirm that the path of least resistance is to the downside and that the selloff is more likely to gain traction than to reverse. Both indicators are sloping lower and could act as dynamic ceilings on any retracements.

Stochastic is climbing from the oversold area and has already crossed higher, reflecting a return in short-term bullish pressure as the corrective bounce plays out. If the oscillator rolls over before reaching overbought territory, that would suggest sellers are eager to step back in before price has fully retraced.

RSI has similarly bounced off its lows and is heading north, though it still has room to recover before approaching overbought conditions. If RSI stalls around the midpoint and turns back down, that would reinforce the case for the downtrend to resume once the pullback runs its course.

EURUSD could take cues from the FOMC meeting minutes lined up midweek, as confirmation of a hawkish Fed even prior to the latest CPI releases could tilt the odds closer to tightening soon.