EUR/USD opens the Asian day with a downside gap

EUR/USD opened the Asian day with a downside gap after ECB President Mario Draghi said “the strengthening of the exchange rate requires further monetary stimulus”. The pair met support near the 1.3845 (S1) barrier and since the possibility for a higher low still exists, the short-term technical outlook has turned neutral for now. Considering that the RSI exited overbought conditions while the MACD, although in its positive territory, fell below its trigger line, we may experience the continuation of the decline for a test at the 1.3810 (S2) hurdle, near the 38.2% retracement of the 4th–11th Apr. advance. On the upside, a clear break above the 1.3900 (R1) is needed to signal the continuation of the upside path and may pave the way towards the highs of 1.3965 (R2).

Support: 1.3845 (S1), 1.3810 (S2), 1.3695 (S3). Resistance: 1.3900 (R1), 1.3965 (R2), 1.4000 (R3).

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