EURUSD retests key support area following steep decline

EURUSD retreated on Monday, erasing early gains after a gap-higher open, and fell nearly 0.7% during late Asian and early European sessions.

While news of a US–EU trade deal initially provided support, the positive impact proved limited. Markets likely priced in expectations of an agreement ahead of the deadline, and further scrutiny of the deal signed in Scotland suggests it may not significantly favor the EU, dampening sentiment.

From a technical perspective, the daily chart has weakened. The 14-day momentum has crossed into negative territory, and price broke below initial support at 1.1672 (daily Tenkan-sen), turning focus to the more substantial 1.1650/30 support zone—marked by the 23.6% Fibonacci retracement of the 1.1065–1.1830 uptrend, the daily Kijun-sen, and rising trendline support.

A clear break below this zone would further erode near-term structure and expose key supports at 1.1556/37 (July 17 higher low and 38.2% Fibo retracement). A loss of this area would complete a bearish failure swing pattern and generate a stronger reversal signal.

Alternatively, if the pair manages to hold above the trendline—preferably with a bounce—it could suggest a healthy correction within the broader uptrend and offer an opportunity for bulls to regain control.

Res: 1.1703; 1.1770; 1.1789; 1.1830
Sup: 1.1650; 1.1630; 1.1589; 1.1556