EUR/USD has bounced off the fresh three-month low of 1.1751 and trades closer to 1.1780 as the US dollar takes a breather from gains. Covid concerns and speculation ahead of Thursday's ECB decision weighed on the euro earlier.
Euro/dollar has been setting lower highs and lower lows – yet remains outside oversold conditions on the four-hour chart. The Relative Strength Index (RSI) is above 30. Bears have not lost their grip.
Moreover, 4 hourly MACD has diverged in favor of the bulls. MACD histogram has produced higher lows, contradicting lower lows on the price chart. That bullish divergence indicates the scenario of a corrective bounce which confirms the reversal chart pattern formation (a falling wedge) after a breakout of the pattern.
Immediate support is at the fresh 1.1754 trough, the lowest since April. It is followed by 1.1740, which was a low point around that time, and then by 1.1717 and 1.17.
Some resistance awaits at 1.1770, a stepping stone on the way down, and then by 1.1820, Tuesday's high point. Further above, 1.1850 and 1.1880 await the bulls.