• EUR/USD grinds at the lowest levels in two months.
• Oversold RSI conditions, key Fibonacci ratio challenges Euro sellers amid sluggish session.
• 21-EMA, previous support line from March restrict short-term rebound.

EUR/USD licks its wounds at the lowest levels since late March amid lackluster markets heading into Thursday’s European session, mildly offered near 1.0735 by the press time.

In doing so, the Euro pair justifies the previous day’s clear downside break of 10-week-old horizontal support, now immediate resistance near 1.0760.

However, the oversold RSI (14) line joins the 61.8% Fibonacci retracement of the pair’s March-April upside, near 1.0735, to challenge the EUR/USD bears.

In a case where the Euro sellers manage to conquer the key Fibonacci retracement, also known as the golden Fibonacci ratio, the odds of witnessing a slump toward the mid-March swing low of around 1.0516 can’t be ruled out. It should be observed that the 1.0700 and 1.0600 round figures may act as intermediate halts during the likely fall.

On the contrary, EUR/USD recovery can initially aim for the previous support line from mid-March, close to 1.0760, before challenging the 21-bar Exponential Moving Average (EMA) hurdle of around 1.0780.

Following that, an upward-sloping trend line from March 21, previous support near 1.0840, may act as the last defense of the EUR/USD bears.

Overall, EUR/USD is likely to remain pressured but the bears need a pause to gather strength.

EUR/USD: Four-hour chart

Trend: Corrective bounce expected