The EUR/USD currency pair on Friday bounced off the current multi-year lows of about 1.0775 to trade at 1.0804 following an extended period of declines. The currency pair has been trading under intensive bearish pressure since the start of the month amid the coronavirus outbreak.
The currency pair has since recovered from oversold levels of the RSI indicator in the 60-min chart to trade centrally. However, the bears retain short-term control as depicted by the 100-hour and the 200-hour SMA lines above the current level of the pair.
EUR/USD Fundamentals Overview
From a fundamental perspective, the EUR/USD currency pair is trading at the back of a relatively quiet period in the US market. On Monday was a bank holiday in the US amid Presidents’ Day celebrations. However, some data did trickle in. This provided traders with some perspective for short-term trading.
On Wednesday, US building permits and housing starts for January beat the (MoM) expectations of 1.45M and 1.425M with 1.551M and 1.567M, respectively. The Producer Price Index ex-food and energy for January also beat the (YoY) expectation of 1.3% with 1.7%. And on Thursday, the Philadelphia Fed Manufacturing Index for February outperformed the expectation of 12 with 36.7.
In the EU, the preliminary Markit Manufacturing and Services PMIs for February beat the expectations of 47.5 and 52.2 with 49.1 and 52.8, respectively. The general and core CPIs for January came in line with the (MoM) and (YoY) expectations.
EUR/USD Technical Analysis (the 60-min Chart)
Technically, the EUR/USD currency pair appears to be experiencing a short-term bearish bias in the market sentiment. The pair has been trading in a descending curve since the start of the month and this seems set to continue through next week.
Therefore, the bears will be targeting short-term profits at around 1.0775 or lower at 1.0750. On the other hand, the bulls will target rebound profits at around 1.0826 or higher at 1.0853 going into next week.
EUR/USD Technical Analysis (the Daily Chart)
In the daily chart, the EUR/USD currency pair appears to be trading in a gently sloping channel. This indicates the existence of a long-term bearish pressure in the market sentiment. The pair has dropped closer to the oversold levels of the RSI indicator, which supports bearish control.
Therefore, the bears will be targeting long-term profits at around 1.0660, 1.0507 or lower at 1.0343. On the other hand, the bulls will look to pounce for profits at around 1.0935, 1.1084 or higher at 1.1203.