The EUR/USD currency pair on Thursday pulled back off the session highs of about 1.0933 to trade at about 1.0895. The currency pair trades within a descending channel formation in the 60-minute chart.
The pair has now descended to trade 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 is trading at the back of a relatively busy period in both markets. On Thursday, the European Central Bank voted to keep the base interest rate unchanged at 4.25% in line with expectations. The deposit rate also remained unchanged at 3.75% as forecasted. The EU construction output for May fell by 2.4% on a (YoY) basis, compared to a decline of 1.5% in the preceding period.
Earlier in the week, the harmonised index of consumer prices for June matched both the (MoM) and (YoY) expectations of 0.2% and 2.5%, respectively, unchanged from the previous period. The core harmonised index of consumer prices for the period edged slightly higher with a change of 0.4% compared to the change of 0.3% (MoM) for the preceding period, while the (YoY) equivalent was steady at 2.9% in line with estimates.
In the US, the initial jobless claims for the week ending July 12 missed the expected claim count of 230k with a significantly higher tally of 243k. The continuing claims for the preceding week also fell short of 1.86 million with a tally of 1.867 million. The Philadelphia Fed Manufacturing Survey for July beat the forecast of 2.9 with a reading of 13.9, up from 1.3.
EUR/USD Technical Analysis (the 60-min Chart)
Technically, the EUR/USD currency pair trades within a descending channel formation in the 60-minute chart. The 14-hour RSI has also plummeted to trade closer to the oversold levels of the indicator.
Therefore, the bears will be targeting extended declines towards 1.0878 or lower to 1.0860. On the other hand, the bulls will look to pounce on rebounds at about 1.0916 or higher at 1.0933.
EUR/USD Technical Analysis (the Daily Chart)
In the daily chart, the EUR/USD currency pair trades within an ascending channel formation. However, the 14-day RSI has recently pulled back to avoid rallying into overbought conditions of the indicator.
Therefore, the bears will be targeting extended pullbacks at about 1.0845 or lower at 1.0794. On the other hand, the bulls will look to ride the current run of gains toward 1.0947 or higher at 1.0997.