On Tuesday, the EUR/USD currency pair extended Monday’s pullback, trading around 1.1540 amid the current geopolitical climate. The currency pair trades within a sharply descending channel formation in the 60-minute chart.

The pair has now plummeted to trade several levels below the 100-hour moving average line. As a result, the currency pair has since plunged into the oversold levels of the 14-hour RSI.

EUR/USD Fundamentals Overview

From a fundamental perspective, the EUR/USD currency pair trades during a relatively busy period in both markets. On Tuesday, the preliminary EU’s harmonized index of consumer prices for February outperformed the expected (YoY) change of 1.7%, with a change of 1.9%. The preliminary core harmonized index of consumer prices for the period also outshone the estimate of 2.2%, with a change of 2.4%.

Earlier in the week, the German retail sales for January missed the expected (MoM) change of -0.2%, with a change of -0.9%. The country’s HCOB Manufacturing PMI for February came in better than expected, with 50.9 versus a forecast of 50.7, up from the previous month’s equivalent of 50.7.

In the US, the ISM Manufacturing PMI for February fell slightly to 52.4, down from 52.6 in January, beating the forecasted reading of 51.8. On the other hand, the ISM Manufacturing Prices Paid for the month improved to 70.5, up from 59 in the previous period, beating the expectation of 59.5.

Traders will be looking forward to the EU’s HCOB Composite PMI for February and the producer price index data for January on Wednesday, ahead of the ISM Services data later in the day, and the nonfarm payrolls on Friday.

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

Technically, the EUR/USD currency pair trades within a sharply descending channel formation in the 60-minute chart. The 14-hour RSI also supports a bearish bias as it edges closer to oversold conditions.

Therefore, the bears will look to extend the latest pullback towards 1.1461 or lower to 1.1388. On the other hand, the bulls will look to pounce on rebounds at about 1.1615 or higher at 1.1692.

EUR/USD Technical Analysis (the Daily Chart)

In the daily chart, the EUR/USD currency pair trades within an ascending channel formation. However, the 14-day RSI has recently pulled back to recover from oversold conditions.

Therefore, the bears will look to stretch the latest pullback towards 1.1268 or lower to 1.0959. On the other hand, the bulls will look to ride the current rally towards 1.1810 or higher to 1.2081.