EUR/USD downtrend deepens on mounting recession fears

EUR/USD kick-started a new round of declines as flash PMIs figures across Europe pointed at a further fall in business activities with both the EU services and manufacturing PMIs edging lower in the contraction area weaker than expected.

As seen on the four-hour chart, a decisive break below the 0.98065 barrier paved the way for euro sellers to try the 0.97434 hurdle, around the 161.8% Fibonacci projection of the last upswing from 0.98065 to 0.99086. If selling pressure intensifies at 0.97434, the price may overcome this obstacle, heading towards the next support at 0.97044. Further push below this level can bring more sellers to join the market and turn their attention towards 0.96412.

Otherwise, should buyers retake control, they may keep the pair sideways between 0.97434 and 0.98065. Further traction above the broken support of 0.98065 can put the last top at 0.99086 on the spotlight.

Diverging EMAs exhibit accelerating bearish sentiment with the 50-EMA being below the 200-EMA. Short-term momentum oscillators reflect a bearish bias in the market. RSI is floating in the oversold area below the 30-level. That means the price may hang out at the 0.97434 hurdle before clearing that. Momentum is also moving down in the selling territory. Likewise, MACD bars get taller below zero, aiming to cross below the signal line as well.