EURUSD trades near 1.0862 but further decline remains possible.
During Wednesday’s early European session, the EURUSD pair was trading higher. The major pair has flirted with weekly lows of 1.0821 before rebounding to 1.0862. However, the potential rise appears restricted as investors become cautious ahead of the European Central Bank’s (ECB) interest rate decision on Thursday.
The preliminary Eurozone Purchasing Managers Index (PMI) will be released just before the ECB’s main event. The Composite PMI is predicted to rise from 47.6 to 48.0 in January. The Manufacturing PMI is expected to rise to 44.8, while the Services PMI will increase to 49.0.
Technical Outlook
The pair’s bearish picture remains intact below the crucial EMA, with the RSI holding below the 50 midline.
EURUSD faces immediate resistance at 1.0895, while the initial support level is at 1.0840.
According to the four-hour chart, EURUSD remains bearish, trading below the 50- and 100-period Exponential Moving Averages (EMA) on a downward slope. Furthermore, the Relative Strength Index (RSI) is in bearish zone, below the 50-day moving average, implying that further decrease is likely.
The 50-period EMA of 1.0895 serves as an immediate resistance barrier for the major pair. The significant upside barrier will appear at 1.0915, which represents the intersection of the upper boundary of the Bollinger Band and the 100-period EMA. The following hurdle is positioned around a high of January 15 at 1.0967, and lastly 1.1000, a psychological round figure.
The initial support level, on the other hand, may be found near the Bollinger Band’s lower limit at 1.0840. An further negative filter to keep an eye on is the January 23 low of 1.0820. Further south, the next downward halt is near December 13’s low of 1.0773.
