EUR/USD is dropping back below 1.0700, trimming gains in the European session. Risk-off flows return and revive the US Dollar’s safe-haven demand, dragging the pair.
The Relative Strength Index (RSI) indicator on the four-hour chart turned south from 70, suggesting that EUR/USD’s latest pullback is a correction of overbought conditions. On the upside, 1.0700 (static level, psychological level, 200-period Simple Moving Average (SMA) on the four-hour chart) aligns as initial resistance.
If that level is confirmed as support, the pair could face interim hurdle at 1.0740 (daily high) before targeting 1.0800.
On the downside, key support seems to have formed in the 1.0620/1.0630 area, where the 100 and the 50-period SMAs align. A four-hour close below that area could be seen as a bearish shift and open the floor to an extended slide toward 1.0600 (psychological level) and 1.0570 (static level).
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