EUR/USD Technical Analysis: lower highs favor a drop below 1.13

• The EUR/USD is currently trading at 1.1313 and could soon drop below 1.13, courtesy of bearish technical setup, Italy uncertainty, and growing Fed-ECB divergence.
• The bearish outlook would be invalidated if the pair bounces off from the 200-week simple moving average (SMA) of 1.1308.

Hourly chart

• The lower highs and lower lows, as seen in the hourly chart, indicate the bears are in control. Notably, the oversold conditions reported by the hourly chart RSI on Friday failed to yield a significant corrective rally, which is usually the case in a bearish market.

Daily chart

• The pair charted a third lower high (bearish pattern) at 1.15 last week, having topped out above 1.18 in September. The 5-day and 10-day exponential moving averages (EMAs) have rolled over in favor of the bears. The 14-day RSI is flashing bearish conditions below 50.00.

Weekly chart

• As can be seen above, the 200-week SMA acted as strong support in August and October. So, the bearish case would weaken if the support again proves a tough nut to crack.