EUR/USD Price Analysis: Key SMA confluence restricts recovery moves around parity

• EUR/USD struggles to extend the corrective bounce off the weekly low.
• 100-SMA, 50-SMA challenge buyers amid bearish MACD signals.
• Three-week-old horizontal area appears tough nut to crack for bears.

EUR/USD retreats to 0.9985 heading into Wednesday’s European session, after falling the most in two years the previous day. In doing so, the major currency pair portrays a pullback from the key moving averages amid bearish MACD signals.

That said, the latest swing low of around 0.9950 may entertain the EUR/USD sellers before directing them to the broad support area between 0.9915 and the 0.9900 threshold.

Following that, the yearly low near 0.9860 is less likely to challenge the pair bears on their way to the October 2002 low near 0.9700.

Alternatively, recovery moves will first struggle to cross the resistance area comprising the 100-SMA and the 50-SMA, around 1.000-0.9990.

Even if the quote regains the parity, the 50% Fibonacci retracement level of August-September downside, near 1.0120 and the latest swing high near 1.0200 could probe the EUR/USD bulls before giving them control.

To sum up, EUR/USD fades bounce off the latest bottom, which in turn keeps bears hopeful. However, the downside room appears limited and hence can restrict short-term moves of the pair.

EUR/USD: Four-hour chart

Trend: Further weakness expected