The EUR/USD currency pair on Friday pulled back off the current end-of-week highs of about 1.2148 to trade at about 1.2124. The currency pair continues to trade within an ascending channel formation in the 60-min chart. This comes after bottoming at a 2-week low of about 1.2025 in mid-week.

The currency pair has now rallied to surpass the 100-hour and the 200-hour SMA lines. Friday’s pullback pushed the currency pair back to the normal trading zone of the 14-hour RSI. It had crossed to overbought levels.

EUR/USD Fundamentals Overview

From a fundamental perspective, the EUR/USD currency pair is trading at the back of a relatively busy period in both markets. On Friday, the preliminary EU Markit PMI composite for February came in better than expected with a reading of 48.1 versus 48. The EU manufacturing PMI also outperformed 54.4 with 57.7 while the services PMI missed 45.9 with 44.7. Earlier in the week, preliminary consumer confidence for February beat -15 with -14.8. The preliminary EU Q4 GDP also outperformed both the (QoQ) and (YoY) expectations of -0.7% and -5.1% with -0.6% and -5%, respectively. 

In the US, the preliminary Markit services PMI for February beat 57.5 with 58.9. The manufacturing PMI came in line with expectations of 58.5. Existing home sales and home sales change for January also beat expectations. Earlier in the week, building permits for January outshone 1.678M with 1.881M while housing starts for the same period missed 1.658M with 1.58M. The initial and continuing jobless claims also failed to match expectations.

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

Technically, the EUR/USD currency pair appears to be trading within an ascending channel formation in the 60-min chart. This indicates a significant short-term bullish bias in the market sentiment.

The bulls will be looking to extend the current bullish run towards 1.2148 or higher to 1.2169. On the other hand, the bears will target short-term pullback profits at around 1.2100 or lower at 1.2078.

EUR/USD Technical Analysis (the Daily Chart)

In the daily chart, the EUR/USD currency pair appears to be trading within a gently ascending channel formation. This indicates a long-term bullish bias in the market sentiment. The pair has now surged above the 100-day and the 200-day SMA lines.

The bulls will target long-term profits at around 1.2206 or higher at 1.2310. On the other hand, the bears will look to pounce for long-term pullbacks at around 1.2005 or lower at 1.1891.