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EURUSD downside unlikely to last
EUR/USD has been drifting lower overnight, following on from a strong rally off the Wednesday $1.1162 low. This uptrend is clearly defined, yet as we saw on Tuesday, the retracements are often deeper than expected. With that in mind, the selling may not be over quite yet, but as long as price does not close below $1.1162, the bullish outlook remains intact.
Typically, the bottoms have seen long lower shadows as witnessed on the Monday and Wednesday lows. We have not seen that yet, and the depth of the previous pullbacks make it likely we could see a stronger move lower before pushing higher.
A closed hourly candle above $1.1338 would provide a signal that the buying looks set to resume, with $1.1376 the next major resistance level. However, without that break through $1.1338, a deeper retracement seems likely, with $1.1252 and $1.1162 the next important support levels.