During the Wednesday session, heavy selling was seen in the EUR/USD. This has pushed the pair below the 1.0600 support level, which will now act as a resistance.
The selling of the Euro comes at a time when the EU banking stocks have come under heavy pressure. This has allowed the US Dollar to gain strength against the European currency.
The pair is now trading at its daily lows after losing almost 200 pips. Before the sell-off, EUR/USD was trading near 1.0759 (daily high).
The daily chart of EUR/USD suggests that the EU bears are still strong, and more downside is highly likely. Similarly, the famous technical indicators are also printing bearishly - The RSI indicator is currently hovering around 43, which is bearish considering 50 is the natural zone.
And if we look at the 20 SMA, the Euro and US Dollar has already crossed it, which suggests the strong presence of sellers. Looking ahead, the pair is now en route to challenge the 1.0550, where the 100 SMA is located.
If the 100 SMA is crossed by the Euro sellers, the next support will be found at the 1.0515 level. This is an important level that corresponds to a 50% retracement of the bearish move seen during 2022.
On the 4-hr chart, the EUR/USD is trading below all the major SMAs and the technical indicators have already reached oversold territory.
Despite the fact that technical indicators are in oversold territory, there is no clear sign that the Euro sellers are exhausted or have left the market.
According to experts, there's some major concentration of stop losses (SL) located below the 1.0515 support level. This means if the 1.0515 level is crossed, we will see further downside.
For now, the important support levels for the EUR/USD are 1.0515, 1.0450, and 1.0420 level. Similarly, the resistance levels for the EUR/USD are located at 1.0640-1.0650 and near 1.0700.