FX.co ★ Technical analysis of GBP/USD for September 26, 2022

The EUR/USD pair reverses from 0.9862 and drops to multi-day lows near 0.9555 - this price formed a bottom this morning in hourly chart time frame. Right now, the EUR/USD pair dropped further and bottomed at 0.9555, the lowest level for two weeks.

It then trimmed losses, rising to 0.9605. The move lower took place amid a stronger US dollar across the board. Probably, the main scenario is continued decline towards 0.9555 again (sentiment level).

Some fundamental news will impact on the EUR/USD pair in coming days because the euro has a flexible exchange rate, which is dependent on three factors: The European Central Bank's benchmark interest rate.

Additionally, the debt levels of individual countries within the EU. Moreover, the strength of the European economy. The EUR/USD pair has broken support at the level of 0.9744 (pivot) which acts as a resistance now.

Some follow-through selling would make the EUR/USD pair vulnerable to challenging the valence mark in the near term. The EUR/USD pair rate has fallen over 3% from its Sept. low of 0.9672 to just over 0.9550 at the time of writing on 26 Sept., despite the European Central Bank (ECB) finally moving to hike interest rates - it is a high risk and jeopardy.

The EUR/USD pair fluctuates in the 0.9610 area, with risk-shifting increasingly to the downside. For these reasons we would be very difficult to see further significant decline for the euro before tomorrow, with signs of stabilization and correction to be the most possible scenario.

According to the previous events, the EUR/USD pair is still moving between the levels of 0.9672 and 0.9500. Therefore, we expect a range of 172 pips in coming hours (before the end of session). The trend is still below the 100 EMA for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside.

Moreover, the RSI starts signaling a downward trend, as the trend is still showing strength below the moving average (100) and (50).

Currently, the price is in a bearish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish trending market. The bias remains bearish in the nearest term testing 0.9672 and 0.9744.

Immediate resistance is seen around 0.9744 levels, which coincides with the weekly pivot.

Hence, the price spot of 0.9672 remains a significant resistance zone. Since the trend is below the 23.6% Fibonacci level (0.9672), the market is still in a downtrend.

Overall, we still prefer the bearish scenario. Consequently, there is a possibility that the EUR/USD pair will move downside.

The structure of a fall does not look corrective. In order to indicate a bearish opportunity below 0.9672, sell below 0.9672 with the first target at 0.9500.

Besides, the weekly support 2 is seen at the level of 0.9450. However, traders should watch for any sign of a bullish rejection that occurs around 0.9744.