EUR/USD: Bears take a breather but downside pressure remains strong

The Euro turned positive for the first time after six straight days in red, as traders collected profits, but recovery attempts were so far limited and facing strong headwinds.

Oversold daily studies suggest the pair may enter correction, but fresh bulls so far struggle to sustain recovery from new five-year low, posted on Thursday.

Daily techs in bearish setup and overall very negative sentiment continue to weigh on Euro, while comments from ECB’s chief economist that the first rate hike in not an issue but the question is the pace in which the ECB continue to tighten its monetary policy, made a minor impact to the EURUSD’s performance.

The pair is on course for the biggest weekly drop since the last week of March 2020 and large bearish weekly candle is expected to weigh, but formation of daily inverted hammer candle would generate initial positive signal and possibly reduce strong bearish pressure.

However, recovery needs to extend above pivotal Fibo resistance at 1.0648 (38.2% of 1.0936/1.0471 bear-leg) to sideline bears.

Res: 1.0564; 1.0580; 1.0648; 1.0700
Sup: 1.0490; 1.0471; 1.0400; 1.0340