The EUR/USD currency pair is trading lower on Friday, extending its losses to the vicinity of the 1.0600 support. The bearish momentum has gathered pace in the last few trading sessions and a sustained loss of impetus could see the pair visit the 2023 low at 1.0481. This would be a significant break lower from the YTD high of 1.2348.
The near-term outlook for the pair remains bearish while it remains below the 3-month resistance line, today near 1.0880. On the other hand, the longer-term view remains constructive while the pair holds above the 200-day SMA, today at 1.0326.
Looking at the daily chart, the pair has been trading within a bearish channel since the start of the year. In this period, the pair has been unable to break the resistance line of the channel, which currently stands at 1.0880. The pair has been struggling to break this line since the start of February and a break lower could see the pair decline further towards the 1.0600 support.
The Relative Strength Index (RSI) has been declining since the start of the year and is currently trading near the oversold area. This suggests that the bearish momentum is gaining traction, and a break of the 1.0600 support could see the pair decline further.
On the other hand, if the pair manages to break the resistance line of the bearish channel, it could see a potential bounce towards the 1.0900 level. This level could act as a strong resistance for the pair, and a break above this could open the door for further upside potential.
In conclusion, the near-term outlook for the EUR/USD pair remains bearish while it remains below the 3-month resistance line. On the other hand, the longer-term view remains constructive while the pair holds above the 200-day SMA. A break of the 1.0600 support could see the pair decline further towards the 2023 low, while a break of the 1.0900 resistance could open the door for further upside potential.
