The EUR/USD pair continued its downward trajectory for the sixth consecutive session on Tuesday, holding near the 1.0620 mark during Asian trading hours. The persistent strength of the US Dollar (USD) exerted pressure on the currency pair, likely fueled by escalating US Treasury yields. Moreover, robust Retail Sales data from the US surpassed expectations, fueling speculation that the Federal Reserve (Fed) could prolong its stance on raising interest rates.
From a technical perspective, indicators signal a bearish sentiment for the EUR/USD pair. The 14-day Relative Strength Index (RSI) is positioned below the 50 mark, indicating a bearish momentum. Additionally, the Moving Average Convergence Divergence (MACD) indicator lies below the centerline, with a divergence below the signal line, suggesting weakness in the pair.
Immediate support for the EUR/USD pair is anticipated around the psychological level of 1.0600. A breach below this level could intensify downward pressure, potentially leading the pair to navigate towards the vicinity of the significant level at 1.0550, followed by November’s low at 1.0516.
On the upside, the major resistance level at 1.0650 serves as a crucial barrier, with the 23.6% Fibonacci retracement level of 1.0672 acting as the next resistance point. A breakthrough above the latter could propel the EUR/USD pair towards exploration of the area around the psychological level of 1.0700, along with the nine-day Exponential Moving Average (EMA) at 1.0715.
