The EUR/USD currency pair pulled back on Friday morning after a weak German data and in anticipation of the US Non-Farm Payrolls later in the day. The pair had rallied to trade above 1.1300 on Thursday, momentarily hitting a weekly high of 1.1306 before pulling back to 1.1223 on Friday.

At the time of writing, the EUR/USD currency pair was trading at 1.1268 amid pressure from high expectations on the US non-farm payrolls. The pair rebound this week has seen it hit new high last witnessed in mid-April amid renewed optimism.

EUR/USD Fundamentals Overview

Early on Friday, the German Bundesbank (the central bank of Germany) issued growth warning cutting projections for economic growth for the year 2019 to just 0.6%. In December, the prediction was 1.6%. The bank cited lackluster exports for its decision. The growth forecast for next year (2020) was also lowered to 1.2% from 1.6% previous.

Germany’s Federal Statistics Office agreed with the bank’s revised forecasts saying that exports dropped 3.7% last month compared to the previous month and 0.5% from the same month last year. Now, traders are awaiting the US non-farm payrolls for May scheduled to be released at 12:00 GMT on Friday to get a clear direction of where the EUR/USD pair could be headed next.

EUR/USD Technical Analysis (the 240-min Chart)

From a technical perspective, the EUR/USD currency pair appears to have recently broken out of a converging Pitchfan following the most recent bullish rebound. However, with the current pressure, the pair could easily drop back to trade within that Pitchfan within the next few trading sessions.

As such, the bears will be more optimistic as they expect the pullback to continue. They will be targeting profits at around 1.1223 in the short-term. On the other hand, the bulls will hope that the current pullback is only short-lived and that the pair could resume the previous rally. They will target short-term profits at around 1.1305.

EUR/USD Technical Analysis (the Daily Chart)

In the daily chart, the pair appears to be in a consolidative pattern formation as the inverted Pitchfan becomes narrower towards the end. The recently attempted breakout could be only temporary, which means that the current pattern could continue.

This gives both the bulls and the bears to try to dictate terms for which direction the next breakout will take the pair. But with both the 100-day and the 200-day moving average lines still placed above the pair, it looks like the bears retain control for now.

In summary, the EUR/USD currency pair continues to trade within a downward trending wedge. Despite the recent attempt at a breakout, the fundamentals seem to support a bearish bias, which means the current pattern could continue.