• EURUSD meets key support area

• Oversold conditions are met, but threats remain

• Bulls need to drive above 1.0780

EURUSD traded sideways on the four-hour chart after Monday’s decline halted at the lower boundary of the two-month-old bearish channel.

The pair remained resilient within the channel despite marking a new lower low at 1.0569 on Tuesday, boosting optimism that the bulls could soon take control of the market.

The RSI and the Stochastic oscillators have bounced off their oversold levels, further increasing the odds for a rebound, though whether the price will successfully overcome the limits near its 20- and 50-period exponential moving averages (EMAs) is still uncertain given its previous failed attempts.

If buyers’ efforts are fruitful, the door will open for the 23.6% Fibonacci retracement of the ongoing downtrend seen at 1.0736. Above that, the 200-period EMA and the channel’s upper band could postpone additional increases towards the 38.2% Fibonacci mark of 1.0840.

Should the downtrend continue below the channel, traders might seek shelter near 1.0540, where the pair rotated higher in March. The 2023 low of 1.0480 could next come to the rescue ahead of the 1.0400 psychological number.

In brief, EURUSD seems to have reached an ideal territory for its next bullish phase as the technical indicators send oversold signals. That said, the downward pattern in the market might keep weighing on sentiment, preventing a meaningful rally in the short term.