EURUSD fell through its ascending trend line on the hourly time frame, suggesting that a reversal from the uptrend might be due. Price is pulling up from the lows around 1.0875, so a correction to the former support might follow.

The Fibonacci retracement tool shows additional levels where sellers might be waiting. The 38.2% Fib is at 1.0929 near the 200 SMA dynamic inflection point while the 50% Fib is near the 1.0950 minor psychological mark. The line in the sand for a bearish pullback is the 61.8% Fib at 1.0962 close to the broken trend line.

The 100 SMA is above the 200 SMA to suggest that the path of least resistance is to the upside or that there’s a chance the uptrend might resume. However, price is already trading below both moving averages as an early indication of selling pressure.

However, stochastic is pulling up from the overbought zone to signal a return in bullish pressure, and the oscillator has plenty of room to climb before reflecting exhaustion among buyers. Similarly RSI is on the move up to suggest that buyers have the upper hand.

EURUSD could take its cues from US flash PMI readings due later today, as well as Fed head Powell’s speech. The industry PMIs might point to a slower pace of contraction for both manufacturing and services sectors, which could be bullish for the US dollar.

On the other hand, weak data could suggest that the Fed might need to start easing monetary policy or cutting interest rates, which might then be bearish for the dollar on fundamentals and risk-on flows.

Traders would likely take direction from Powell’s rhetoric, though, as indications that the central bank could resume tightening might mean upside for the US currency. Recall that the US core PCE price index came in line with expectations of a 0.2% uptick.