Current Trends EUR/USD ended Thursday in a negative state, falling below 1.0900. Early on Friday, dovish comments from ECB officials are putting pressure on the euro, and the deteriorating market mood is making it difficult for the pair to recover.
Late Thursday, EUR/USD faced selling pressure, ending a six-day winning streak and closing in negative territory. The technical outlook suggests a buildup of bearish momentum, and early Friday the pair is trading below 1.0900.
During the U.S. trading session on Thursday, a risk-averse market environment and ambiguous comments from ECB President Lagarde on the policy outlook caused EUR/USD to drop. Early on Friday, ECB Governing Council member and Governor of the Bank of France François Villeroy de Galhau stated that growth uncertainty has increased since a few months ago and added that market expectations for the ECB rate outlook are reasonable. Similarly, ECB Governing Council member Gediminas Šimkus also noted that the market’s prediction of two 25-basis point rate cuts this year is in agreement with his views.
There are no significant macroeconomic data releases scheduled on the U.S. economic calendar for Friday. If the flow into safe-haven assets continues to dominate financial markets, the USD could maintain its strength heading into the weekend, potentially pushing EUR/USD further down.
Technical Analysis The 4-hour chart’s Relative Strength Index (RSI) has fallen below 50 for the first time since late June, and EUR/USD closed two consecutive 4-hour candles below the lower limit of the ascending trend regression channel. This suggests a shift to a bearish short-term outlook.
On the downside, 1.0880 (the 23.6% Fibonacci retracement of the latest uptrend) functions as immediate support. If this level starts to act as resistance, the next supports will be at 1.0840 (38.2% Fibonacci retracement) and then at 1.0820 (100-period Simple Moving Average).
On the upside, 1.0900 (psychological level, static level) acts as the initial resistance, followed by 1.0950 (static level) and 1.1000 (psychological level).
Trade Advice
- Short Positions: Target 1.0840 and 1.0820 if the price falls below 1.0880. Set a stop loss at 1.0900.
- Long Positions: Target 1.0950 and 1.1000 if the price rises above 1.0900. Set a stop loss at 1.0880.
