EURUSD is trending lower inside a descending channel on its 4-hour time frame, just recently bouncing off the resistance. Price is down to the first Fibonacci extension level but might still have enough bearish momentum to head to the lower ones.

The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the selloff is more likely to gain traction than to reverse. The gap between the moving averages has narrowed to reflect slowing bearish pressure, but the indicators have refrained from making a new crossover.

Price is closing in on the 50% level at the mid-channel area of interest next and might still make it down to the swing low at the 61.8% Fib or 1.1250. Stronger selling pressure could take EURUSD down to the 78.6% extension near 1.1200 or the channel support or the full extension at 1.1138.

RSI is turning higher from the oversold zone to signal that bullish pressure is returning. If so, buyers could push price back up to the channel top around the 1.1350 minor psychological mark and beyond. Stochastic is also heading higher to signal that bullish pressure is back. The oscillator has plenty of room to climb before reaching the overbought zone, which means that buyers could stay in play for a while.

The euro has been on weak footing as leading indicators from the region have consistently reflected a slowdown. The ECB might even be looking into a TLTRO that could help support liquidity for banks, although this wouldn’t necessarily be an easing measure. Still, there’s a growing consensus that the central bank is a longer way off from hiking rates given how the top economies are slowing down.

Meanwhile, the dollar has the NFP report to look forward to. Data has been upbeat in the past couple of months so there’s a good possibility of a pullback.