• EUR/USD fades recover from three-week low, pares the biggest daily loss in a month.
• Impending bear cross on MACD hints at further downside.
• Four-month-old resistance line holds the key to the bull’s entry.

EUR/USD takes a U-turn from its intraday high as it pares the daily gains around 1.0630 heading into Friday’s European session.

In doing so, the major currency pair fails to cross the 21-DMA despite consolidating the biggest daily loss in a month.

That said, bearish MACD signals and lower-high formation keeps the EUR/USD sellers hopeful to revisit the mid-June high surrounding 1.0600.

It’s worth noting, however, that a clear downside break of the 1.0600 could make the pair vulnerable to test the six-week-old horizontal support around 1.0460-75.

Meanwhile, the 50-DMA level of 1.0685 and a downward sloping resistance line from February, close to 1.0730, challenge the pair’s recovery moves beyond the 21-DMA level of 1.0650.

Even if the EUR/USD prices rise past 1.0685, the late May top near 1.0785 acts as an extra filter to the north.

EUR/USD: Daily chart

Trend: Further weakness expected