EUR/USD: Technical outlook points to a correction before the next leg lower

EUR/USD has dropped to its weakest level since May 2020 at 1.0820 at the start of the week but the pair has managed to stage a modest rebound. However, euro recovery attempts are set to remain short-lived, FXStreet’s Eren Sengezer reports.

Euro is unlikely to extend recovery against the greenback

“Sadly, the latest developments suggest that a de-escalation of the Ukraine crisis is nowhere near in sight and EUR/USD should remain on the back foot with the dollar holding its ground.”

“Despite the latest recovery attempt, the Relative Strength Index (RSI) indicator on the four-hour chart stays below 30, showing that the pair is still technically oversold.”

“In case the pair tries to extend its correction, it is likely to meet resistance at 1.0900 (psychological level), 1.0950 (static level) and 1.1000 (psychological level).”

“On the downside, the first bearish target aligns at 1.0820 (22-month low) before 1.0800 (psychological level) and 1.0770 (static level).”

See: EUR/USD could fall to 1.00-1.05 as Ukraine conflict poses immediate threat to euroarea – ANZ