• EUR/USD bears are testing the waters before displaying their full strength.
• Downward-sloping 20-and 50-EMAs add to the downside filters.
• A slippage below 0.9540 will direct the greenback bulls towards a fresh two-decade low.

The EUR/USD pair is hovering around the critical support of 0.9540, which is a fresh two-decade low, printed on Monday. In the Asian session, the asset declined firmly after attempting to cross the round-level hurdle of 0.9600. The major is auctioning at a make or break level, therefore a volatility enhancement in the counter cannot be ruled out.

On an hourly scale, the shared currency bulls are testing the waters first at 0.9540 around and a follow-up selling pressure will send the pair into a negative trajectory. Also, the downward-sloping trendline from Tuesday’s high at 0.9671 will be a major barricade.

The 20-and 50-period Exponential Moving Averages (EMAs) at 0.9583 and 0.9622 respectively are sloping downwards, which adds to the downside filters.

Adding to that, the Relative Strength Index (RSI) (14) is oscillating in a bearish range of 20.00-40.00, which indicates more weakness ahead.

Should the asset drops below Wednesday’s low at 0.9542, the greenback bulls will drag the asset towards June 2002 low at 0.9313, followed by October 2001 high at 0.9241.

Investors could go for a contra bet if the asset oversteps Tuesday’s high at around 0.9670, which will drive the asset towards Friday’s high at 0.9852. A breach of the latter will send the major towards the round-level resistance at 0.9900.

EUR/USD hourly chart