EURUSD recovers somewhat after hitting 2-week low

EURUSD has declined aggressively on Friday, completing a two-week low near 1.1200. The price tumbled back below the 23.6% Fibonacci retracement level of the downleg from 1.1815 to 1.1106, around 1.1275 as well as below the short-term moving averages.

From the technical point of view, the market is losing momentum again, after the strong pullback on the three-month high of 1.1410 confirmed by the technical indicators. The MACD is falling below its red trigger line and is hovering near the zero line. However, the RSI indicator is trying to recover in the negative territory as it is sloping marginally higher.

More declines could drive the price towards the immediate support level of 1.1180 and if there is a successful drop below this line would open the way for a test of the two-year low of 1.1106. In case of steeper losses could send EURUSD could reach the 1.0900 psychological level, registered on March 2017.

On the other side, if the price recovers somewhat and jumps above the 40-simple moving average (SMA) it could meet resistance at the 23.6% Fibo of 1.1275 and at the 20-SMA currently at 1.1290. More gains could pare the previous week’s losses, challenging the 38.2% Fibo of 1.1380.

Having a look at the bigger picture, EURUSD has been developing within a descending channel over the last five months and traders could still have their attention to the downside.