EUR/USD Technical Analysis: Looks heavy after strong rejection above key hurdle

• Wednesday's candle is signaling buyer exhaustion above key resistance. 
• EUR/USD is likely to test dip demand with a drop to 1.1050.

EUR/USD is looking south, having faced strong rejection above key resistance at 1.1097 in the overnight trade.

The pair clocked a high of 1.1116 during the US trading hours only to close Wednesday with marginal losses at 1.1078.

Essentially, the pair created a candle with a long upper shadow, signaling buyer exhaustion above the bearish lower high of 1.1097 created on Nov. 21. The pair is now likely to test dip demand with a drop to 1.1050 – more so, as the MACD histogram on the 4-hour chart has crossed below zero. Currently, EUR/USD is sidelined around 1.1080. 

The recent lows below 1.10 could come into play if the pair finds acceptance below 1.1066 (Wednesday's low), confirming a bearish reversal. On the flip side, a convincing close above 1.1097 is needed to invalidate the lower highs set up and confirm a bullish reversal.

Daily chart

Trend: Bearish

Technical levels