On Wednesday, the EUR/USD currency pair pulled back off the session highs of about 1.0846 to trade at about 1.0826. The currency pair trades within a sideways channel formation in the 60-minute chart.

The pair has now pulled back to trade slightly below the 100-hour moving average line. Wednesday’s pullback prevented the currency pair from ascending into the overbought 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 Wednesday, the Federal Reserve voted to keep the base interest rate unchanged at 5.5%, in line with expectations.

However, Fed Chair Jerome Powell hinted rate cuts may begin as early as September. The US ADP employment change for July missed the expectation of 150k with a significantly lower tally of 122k, down from 155k in June.

The Chicago Purchasing Managers Index for July exceeded the forecast of 44.5 with a reading of 45.3, while the employment cost index for Q2 missed the estimate of 1% with a change of 0.9%. Pending home sales for June beat the forecasted (MoM) change of 1.3% with a change of 4.8%.

In the EU, the preliminary EU harmonised index of consumer prices for July exceeded the forecasted (YoY) change of 2.4% with a change of 2.6%. The preliminary core harmonised index of consumer prices for the period also beat 2.8% with a (YoY) change of 2.9%, while Germany’s unemployment change for July missed 15k with a tally of 18k. The German unemployment rate for the month was in line with the estimate of 6%, unchanged from June.

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

Technically, the EUR/USD currency pair trades within a sideways channel formation in the 60-min chart. The 14-hour RSI has recently, pulled back to avoid rallying into overbought conditions.

Therefore, the bears will be targeting extended pullbacks at about 1.0802 or lower at 1.0779. On the other hand, the bulls will look to pounce on rebounds at about 1.0846 or higher at 1.0868.

EUR/USD Technical Analysis (the Daily Chart)

In the daily chart, the EUR/USD currency pair trades within a sharply descending channel formation. The 14-day RSI also seems to support a bearish bias after pulling back to avoid entering overbought conditions.

Therefore, the bears will be targeting long-term profits at about 1.0749 or lower at 1.0671. On the other hand, the bulls will look to pounce on profits at about 1.0903 or higher at 1.0978.