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EUR/USD regains positive traction on Wednesday and snaps a three-day losing streak.
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A modest USD downtick lends support ahead of the US macro data and FOMC minutes.
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A convincing break below the 50% Fibo. might shift the bias in favour of bearish traders.
The EUR/USD pair attracted some buying in Wednesday’s Asian session and for now, it seems the three-day rate range has touched the previous week’s low. The spot price currently trades around the 1.0960 region, up just 0.15% for the day, and the US dollar (USD) remains at the mercy of price movements.
The USD index (DXY), which tracks the greenback against a basket of currencies, pared some of Tuesday’s strong gains amid some retracement trade ahead of key US macro data and key FOMC meeting minutes. Meanwhile, doubts about the Federal Reserve’s (Fed) key rate cut could prevent traders from placing aggressive bearish bets and put a lid on further gains for the EUR/USD pair.
From a technical perspective, spot prices showed some resilience below the 100-period simple moving average (SMA) on the 4-hour chart and found decent support near the 50% Fibonacci retracement level of the December 11-28 rally. The latter is pegged near the 1.0940 area and should now act as a pivotal point, which should be broken, paving the way for a pullback from the 1.1135-1.1140 area or an extension to the five-month peak touched last week.
The EUR/USD pair could then weaken below the 200-period SMA on the 4-hour chart, currently near the 1.0920 region, and towards testing the 1.0900 mark, the 61.8% Fibo. level, near the 1.0885-1.0880 zone. Some follow-through selling will be seen as a fresh trigger for bearish traders and further drag the spot price towards the 1.0835-1.0830 intermediate support towards the 1.0800 round-figure mark and the 1.0765-1.0760 region.
Meanwhile, oscillators on the daily chart – although losing traction – are still holding in positive territory and favoring bullish traders. That said, any intraday move-up could face some resistance near the 1.0980 area. It is closely followed by the 1.1000 psychological mark, above which the EUR/USD pair may climb the 1.1040-1.1045 zone on its way to the 1.1080-1.1085 zone, aiming to recover the 1.1100 round figure.
EUR/USD 4-hour chart
Technical levels to watch
EUR/USD
