• EUR/USD dribbles around short-term support line after dropping the most in a week.
• Sustained trading below 50-SMA, downbeat oscillators favor sellers.
• Bulls need validation from six-week-old resistance line to retake control.

EUR/USD treads water around a two-week-old support line as it seesaws around 0.9970 during Wednesday’s Asian session, after falling the most in a week the previous day. In doing so, the major currency pair portrays the pre-Fed anxiety while keeping the bears hopeful by staying below 50-SMA in the last one week.

In addition to the sustained trading below the 50-SMA, bearish MACD signals and the downbeat RSI (14), not oversold, also keeps the EUR/USD sellers hopeful.

However, a clear downside break of the two-week-old support line, near 0.9950, becomes necessary for the pair sellers to regain control. In that case, a south-run towards the yearly low near 0.9860 appears imminent.

In a case where EUR/USD remains bearish past 0.9860, the odds of its gradual drop towards the September 2002 bottom near 0.9600 can’t be ruled out.

On the contrary, 50-SMA and the 200-SMA restrict short-term EUR/USD rebound around 1.0030 and 1.0060 in that order.

Following that, a downward sloping resistance line from August 10, close to 1.0150 at the latest, will be crucial for the bulls to watch before retaking control.

EUR/USD: Four-hour chart

Trend: Further weakness expected