The EUR/USD currency pair is facing strong resistance after its recent rally saw it break out from the descending channel. The pair rallied to hit a new 3-month high of 1.1412 mid-week but has since pulled back to oscillate within the 1.1370 level.

And when you look at the picture with a broader view, the EUR/USD pullback appears likely to continue until the pair returns to the downward trending channel it traded within for so long. This sets it for some exciting times ahead.

EUR/USD Fundamentals Overview

From a fundamentals perspective, the EUR/USD currency pair continues to trade at the back of what has been a flat week. There has been little going in the way of economic data to give the currency pair clear direction.

However, all eyes will be on the G20 meeting tomorrow (Friday, June 28) as the world’s top 20 economies meet to deliberate on several key issues including trade relations. 

Traders will also look forward to Germany Import Price Index data as well as France Producer Price Index and Consumer Price Index that will be out early in the day.

EUR/USD Technical Analysis (the 60-min Chart)

From a technical perspective, the EUR/USD currency pair is trading within a consolidative pattern that appears to be forming a symmetrical triangle. This could lead to a bearish breakout given the most recent pullback in the pair. 

As such, the bears will be more optimistic going into Friday with the 1.1350 providing a realistic short-term target. More profitable opportunities can also be found inside the previous descending channel around 1.1300.

On the other hand, the bulls will hope that a rebound takes place to return the pair above 1.1400, which will be a good target for short-term profits.

EUR/USD Technical Analysis (the Daily Chart)

In the daily chart, the pair continues to trade with a significant bearish bias, which suggests that the bears retain control. The EUR/USD also appears to have recently hit overbought levels in the Relative Strength Index indicator, which implies that a pullback could be imminent.

The 1.1400 resistance zone appears to hold firm while the 200-day moving average line could also add downward pressure to the pair.

In summary, the EUR/USD currency pair appears to be trading in a consolidative pattern that could lead to a bearish breakout. However, with several key economic events scheduled for Friday, the picture could change rapidly during the day.