The EUR/USD currency pair on Wednesday pulled back off the session highs of about 1.0848 to trade at about 1.0848. The currency pair appears to be trading within a descending channel formation in the 60-minute chart.

The pair has now fallen to trade a few levels below the 100-hour moving average line. As a result, the currency pair appears to be on the verge of falling into the oversold levels of the 14-hour RSI.

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 Wednesday, US existing home sales for April missed the expectation of 4.21 million with 4.14 million (MoM) down from 4.22 million reported in the previous period.

The US existing home sales change for the period improved to -1.9% up from the preceding period’s equivalent of -3.7% (MoM), while the MBA mortgage applications for the week ending May 17 grew by 1.9% compared to a growth rate of 0.5% in the preceding week.

In the EU, Germany’s producer price index for April came in worse than expected with a change of -3.3% compared to a forecast of -3.2% on a (YoY) basis. The (MoM) equivalent was in line with the estimate of 0.2%.

The EU’s seasonally adjusted current account balance for March reflected EUR 35.8 billion compared to a forecast of EUR 30.2 billion, while the non-seasonally adjusted trade balance for the period outshone EUR 19.9 billion with a reading of EUR 24.1 billion.

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

Technically, the EUR/USD currency pair appears to be trading within a descending channel formation in the 60-minute chart. The 14-hour RSI also seems to support a short-term bearish bias as it edges closer to oversold conditions.

Therefore, the bears will be targeting extended declines at about 1.0793 or lower at 1.0766. On the other hand, the bulls will be targeting potential rebound profits at about 1.0848 or higher at 1.0876. 

EUR/USD Technical Analysis (the Daily Chart)

In the daily chart, the EUR/USD currency pair appears to be trading within an ascending channel formation. However, the 14-day RSI has recently pulled back to avoid rallying into overbought conditions.

Therefore, the bears will be targeting extended pullbacks at about 1.0730 or lower at 1.0646. On the other hand, the bulls will look to ride the current rally towards 1.0901 or higher to 1.0980.