EUR/USD: Recovery attempts likely to remain as technical corrections

EUR/USD has recovered modestly after having touched its weakest level in nearly two decades at 0.9900. Nevertheless, the pair is unlikely to enjoy additional recovery gains, FXStreet’s Eren Sengezer reports.

Near-term technicals suggest EUR/USD remains extremely oversold

“The short-term technical outlook suggests that the stays extremely oversold and the improving market mood suggests that the pair could extend its recovery. However, the underlying factors weighing on the pair remain in place, suggesting that recovery attempts are likely to remain as technical corrections.”

“EUR/USD seems to have met support at 0.9900 and as long as this level stays intact, additional recovery gains toward 1.0000 (psychological level) could be witnessed. In case sellers move to the sidelines and this level is confirmed as support, the next recovery targets could be set at 1.0025 (20-period SMA) and 1.0050 (static level).

“On the downside, a four-hour close below 0.9900 could open the door for an extended slide toward 0.9870 (former resistance area from October 2002) and 0.9800 (psychological level).”