The EUR/USD pair is trading stronger at around 1.0825, breaking a two-day losing streak during Wednesday’s Asian session. However, the pair’s upside may be limited due to uncertainty over potential rate cuts by the European Central Bank (ECB) in September, following disappointing economic growth data from Germany. The market’s attention is now shifting to the Federal Reserve’s (Fed) interest rate decision later on Wednesday.
Technical Analysis Points to Bearish Outlook
Despite the recent uptick, the bearish outlook for EUR/USD remains, as the pair trades below the key 100-period Exponential Moving Average (EMA) on the 4-hour chart. The Relative Strength Index (RSI) stands below the midline at approximately 43.90, indicating that the path of least resistance is downward.
If the pair manages to break above the 1.0845 mark, which coincides with the 100-period EMA, it could signal a potential upward move. The next resistance level is at 1.0870, where the upper boundary of the Bollinger Band and the high of July 29 converge. Further resistance is seen at the psychological level of 1.0900.
Conversely, key support is located in the 1.0795-1.0805 range, which includes the lower limit of the Bollinger Band, a round figure, and the low of July 30. A break below this region could lead to a drop to 1.0776, the high of July 1, with further support at 1.0709, the low of July 2.
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