EUR/USD Eyes 2023 Low as RSI Flirts with Oversold Zone

US Dollar Outlook: EUR/USD

EUR/USD pushes below the November 2023 low (1.0517) after failing to hold within the monthly opening range, with the recent selloff in the exchange rate pushing the Relative Strength Index (RSI) up against oversold territory.

EUR/USD Eyes 2023 Low as RSI Flirts with Oversold Zone

EUR/USD trades to a fresh yearly low (1.0496) as it falls for the fifth consecutive day, and a move below 30 in the RSI is likely to be accompanied by a further decline in the exchange rate like the price action from earlier this year.

In turn, EUR/USD may attempt to test the 2023 low (1.0448) as it continues to carve a series of lower highs and lows, and data prints coming out of the US may keep the exchange rate under pressure as the US Retail Sales report is anticipated to show another rise in household spending.

US Economic Calendar

US Retail Sales are projected to increase 0.3% in October following the 0.4% expansion the month prior, and a positive development may push the Federal Reserve to unwind its restrictive policy at a slower pace amid little signs of a looming recession.

In turn, waning speculation for a December Fed rate-cut may keep EUR/USD under pressure, but a weaker-than-expected US Retail Sales report may drag on the Greenback as it encourages the Federal Open Market Committee (FOMC) to implement lower interest rates at its last meeting for 2024.

With that said, EUR/USD may attempt to retrace the decline from earlier this week to keep the RSI above 30, but the exchange rate may test the 2023 low (1.0448) should the bearish price series persist.

EUR/USD Chart – Daily

Chart Prepared by David Song, Strategist; EUR/USD on TradingView

• EUR/USD continues to register fresh yearly lows after pushing below the monthly opening range at the start of the week, with a breach below the 2023 low (1.0448) opening up 1.0370 (38.2% Fibonacci extension).
• Next area of interest comes in around 1.0200 (23.6% Fibonacci retracement) but failure to clear the 2023 low (1.0448) may curb the recent series of lower highs and lows in EUR/USD.
• Need a move back above the 1.0610 (38.2% Fibonacci retracement) to 1.0640 (23.6% Fibonacci retracement) region for EUR/USD to snap the bearish price series, with a breach above 1.0770 (38.2% Fibonacci retracement) bringing the 1.0860 (50% Fibonacci retracement) and 1.0880 (23.6% Fibonacci extension) area back on the radar.

Additional Market Outlooks

AUD/USD Vulnerable amid Break Below November Opening Range

US Dollar Forecast: USD/CAD on Cusp of Testing 2022 High

GBP/USD Outlook Hinges on Break of Monthly Opening Range

US Dollar Forecast: USD/JPY Defends Post-US Election Rally

--- Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong