EUR/USD moves sideways amid oversold readings

• The EUR continues to trade in the sideways manner below 1.20.
• The 14-day relative strength index (RSI) shows oversold conditions.
• Bull RSI divergence in the 4-hour chart, so cannot rule out the possibility of a corrective rally.

The EUR/USD pair will likely trade in the sideways manner below 1.20 and could witness a minor corrective rally, courtesy of oversold conditions.

As of writing, the spot is trading at 1.1965 and the daily RSI is holding below 30.00, signaling short-term oversold conditions. Further, the RSI in the 4-hour chart created higher lows even as the spot fell to 1.1910 (lowest level since late December), signaling a bullish divergence.

Hence, a corrective rally could be on the cards. A better-than-expected German factory orders figure (due at 06:00 GMT) and sentix investor confidence (due at 08:30 GMT) could become a reason for a corrective rally.

That said, the focus on the growing Fed and ECB monetary policy divergence will likely keep the gains under check.

EUR/USD Technical Outlook

FXStreet Chief Analyst Valeria Bednarik says the risk is leaned to the downside, although a short-term bullish correction is not out of the table.

Support levels: 1.1940 1.1910 1.1880

Resistance levels: 1.2000 1.2030 1.2055