• EUR/USD retreats towards the multi-day high, stays inside monthly falling wedge.
• Descending trend line from mid-February, 61.8% FE of September 2021-February 2022 moves to restrict downside past 1.1060.
• Weekly resistance line, 50-SMA guards short-term rebound, confirmation of falling wedge will be crucial for the bulls.
• Oversold RSI, downbeat MACD signals favor intermediate bounces despite suggesting an overall bearish trend.

EUR/USD remains on the back foot around 1.1110 during Thursday’s Asian session, reversing the corrective pullback the lowest since May 2020 marked the previous day.

In doing so, the major currency pair remains inside a short-term bullish chart pattern called falling wedge, recently around the support line close to 1.1060.

The RSI’s bounces off the oversold territory joined receding bearish of the MACD signals to favor the latest rebound. However, failures to cross the weekly resistance line and cautious sentiment in the market seemed to have recalled the EUR/USD bears.

That said, the pair’s further weakness towards the stated wedge’s support line near 1.1060 becomes imminent.

However, a 13-day-old descending trend line and the 61.8% Fibonacci Expansion (FE) of the pair’s moves between September 2021 and February 2022, respectively around 1.1010 and the 1.1000 threshold, will challenge the EUR/USD pair’s additional weakness.

Meanwhile, recovery moves beyond the weekly resistance line, close to 1.1190 by the press time, will be challenged by the 50-SMA and the wedge’s upper line, near 1.1235 and 1.1270.

It should be noted, though, that a clear break of the 1.1270 will confirm the bullish chart pattern, which in turn will enable the EUR/USD buyers to regain control with eyes on February’s top on 1.1495 as the next hurdle before the additional run-up.

EUR/USD: Four-hour chart

Trend: Further weakness expected