On Thursday, the EUR/USD currency pair pulled back off the session highs of about 1.0863 to trade at about 1.0813. The currency pair trades completed a downward breakout from a descending channel formation.
The pair has now plummeted to trade a few levels below the 100-hour moving average line. As a result, the currency pair is on the verge of entering 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 Thursday, the European Central Bank lowered the base interest rate by 25 basis points to 3.4% in line with expectations. The bank also cut the deposit rate by a similar margin to 3.25% from 3.5% in line with estimates.
The EU’s harmonised index of consumer prices for September was unchanged at -0.1% (MoM) in line with expectations, while the core harmonised index of consumer prices for the period matched the forecast of 2.7% (YoY), also unchanged from August.
In the U.S. the retail sales for September outperformed the expected (MoM) change of 0.3% with a change of 0.4%. The retail sales ex-autos for the period also beat 0.1% with a change of 0.5% (MoM), while the industrial production for the month fell short of -0.2% with a change of -0.3% (MoM).
On the other hand, the U.S. initial jobless claims for the week ending October 11 outshone the forecasted claim count of 260k with a significantly lower tally of 240k. The Philadelphia Fed Manufacturing Survey for October also beat 3 with a reading of 10.3.
EUR/USD Technical Analysis (the 60-min Chart)
Technically, the EUR/USD currency pair has completed a downward breakout from a descending channel formation in the 60-minute chart. The 14-hour RSI has also pulled back into oversold conditions.
Therefore, the bears will target extended pullbacks at about 1.0761 or lower at 1.0708. On the other hand, the bulls will look to pounce on rebounds at about 1.0863 or higher at 1.0914.
EUR/USD Technical Analysis (the Daily Chart)
In the daily chart, the EUR/USD currency pair is on the verge of completing a double-top reversal pattern formation. The 14-day RSI also supports a bearish bias as it moves closer to oversold conditions.
Therefore, the bears will be targeting extended declines at about 1.0614 or lower at 1.0409. On the other hand, the bulls will look to pounce on rebounds at about 1.1009 or higher at 1.1210.