Important events today:

13:10 UTC: Speech by ECB Vice President de Guindos

EUR/USD is trading down near 1.0840 during the Asian session on Monday, retreating from its recent gains. The pair is under downward pressure due to the risk-off sentiment, which can be attributed to the escalation of tensions in the Middle East following a drone attack on the United States (US) post in Yordon that killed three US servicemen.

The significant 1.0850 level could act as immediate resistance for the EUR/USD pair. A successful break above this level could take the pair to the 23.6% Fibonacci retracement level at 1.0889 and then to the 21-day exponential moving average (EMA) at 1.0898, as well as the psychological barrier at 1.0900.

The 14-day Relative Strength Index (RSI) for EUR/USD is below the 50 mark, indicating bearish momentum in the market. In addition, the lagging Moving Average Convergence Divergence (MACD) indicator is signaling a potential confirmation of the downtrend as the MACD line sits below the center and signal line.

The previous week, the EUR/USD pair made a monthly low at 1.0813. A decisive break below this monthly low could trigger bearish sentiment, potentially taking the pair towards the psychological support level of 1.0800. If the pair continues to decline below the psychological level, it could face pressure towards the 1.0750 support level.

Recommendations: Trade with Sell orders from the current price level