EURUSD recovered in recent sessions following an aggressive sell-off, but the bulls seem to be having trouble overcoming a downtrend line drawn from the March peak. The near-term outlook therefore remains negative for the time being, though a break above the downtrend line and more importantly above the 1.0890 zone, could turn it back to neutral.
Short term momentum oscillators rest near their neutral levels, providing no clear directional signals. The RSI is currently testing its 50 zone while the MACD is near zero.
If the bulls manage to overcome the down-sloping line, their next target would likely be the intersection of the 1.0890 region and the 50-period simple moving average (SMA) on the four-hour chart. An upside break of that crossroads could turn the very short-term outlook back to neutral, turning the focus to the 1.0950 region next.
Should the bears retake the reins, initial support might come from the 1.0745 zone, a negative break of which would open the door for another test of 1.0635. If that fails to hold too, all eyes would turn to 1.0570, an area that halted the drop back in April 2017.
In short, the near-term picture is still negative. A clear break above the downtrend line and more crucially above the 1.0890 hurdle is needed to bring that into question.
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