EURUSD is trending lower on its hourly time frame, forming lower highs and lower lows inside a descending channel. Price is currently testing the 50% Fibonacci retracement level, which might keep gains in check.

If so, EURUSD could resume the slide to the swing low at 1.0615 or the channel bottom closer to 1.0600. A higher correction, on the other hand, could reach the 61.8% Fib that’s closer to the channel top at 1.0730.

The 100 SMA is already below the 200 SMA to confirm that the path of least resistance is to the downside or that the selloff is more likely to gain traction than to reverse. These moving averages also line up with the 50% Fib to add to its strength as a ceiling.

However, the gap between the indicators is narrowing to reflect slowing bearish pressure and a potential upside crossover.

Stochastic has been indicating overbought conditions for quite some time and looks ready to head south to signal a return in selling pressure. RSI has a bit more room to climb but is hovering close to the overbought region as well.

EURSUD could take its cues from the eurozone PMI due on Tuesday’s London session. Improvements are eyed for both the manufacturing and services sectors of Germany and France, which might mean upside for the shared currency.

US markets are closed on a holiday today, so the dollar could wait until the release of the flash PMI readings on Tuesday as well. The flash manufacturing PMI is expected to improve from 46.9 to 47.2 while the services PMI could climb from 46.8 to 47.3, reflecting a slower pace of contraction for both industries.

Later in the week, the FOMC meeting minutes are up for release and might have a stronger impact on EURSUD price action. Hawkish remarks, in particular, could bring more upside for the US currency.