EUR/USD Price Analysis: A deeper pullback stays on the cards

• EUR/USD tests the 21-day SMA around 1.2210 on Friday.
• Extra losses could extend to the 1.2130 region.

EUR/USD extends further the downside momentum, testing and rebounding from the 21-day SMA near 1.2210 on Friday.

Against this, the corrective downside in EUR/USD could have further legs to go and a move lower to the weekly low at 1.2129 (December 21) should not be ruled out in the short-term horizon.

In the meantime, extra gains in EUR/USD are likely while above the critical 200-day SMA, today at 1.1564.

Looking at the monthly chart, the (solid) breakout of the 2008-2020 line is a big bullish event and should underpin the continuation of the current trend.

EUR/USD daily chart