EURUSD recovers somewhat from 1.1500
EURUSD rebounded from the medium-term ascending trendline near the psychological 1.1500 level as investors assessed the latest PMI data and dovish comments from a Federal Reserve official, which boosted expectations for lower US interest rates.
The pair has been moving within a downward-sloping channel since mid-September, shifting its short-term outlook to bearish. However, as long as it remains above the medium-term uptrend line and well above the 200-day simple moving average (SMA), the potential for an upside recovery is still intact.
Technical indicators suggest an oversold market, with the RSI edging slightly higher but still below the 50 level, while the stochastic oscillator has formed a bullish crossover between its %K and %D lines, pointing to an impending recovery.
If the upward momentum continues, the pair may first challenge the 20-day SMA at 1.1560, followed by the near-term downtrend line and the 50- and 100-day SMAs around 1.1640. Slightly above, the 1.1660 resistance could present another hurdle before the 1.1730 level.
On the other hand, a break below the medium-term uptrend line could accelerate downside pressure, targeting the three-month low near the 200-day SMA at 1.1420. Further declines could bring the lower boundary of the descending channel at 1.1370–1.1390 into play, potentially pausing bearish momentum.
To conclude, as EURUSD remains under short-term bearish pressure within the descending channel, the medium-term trend and positioning above the 200-day SMA keeps the door open for a potential rebound.
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