The EUR/USD currency pair on Wednesday pulled back off the session highs of about 1.1190 to trade at about 1.1105. The currency pair trades within a sideways channel formation in the 60-minute chart.
Wednesday’s pullback pushed the currency pair to the 100-hour moving average line. However, the pair still seems to have room left to run before reaching 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 Wednesday, the Federal Reserve cut the base interest rate by 50 basis points to 5%, down from 5.5%. Analysts were expecting a rate cut of 25 basis points to 5.25%.
On the other hand, US building permits for August outperformed the expected tally of 1.41 million with a tally of 1.475 million, while housing starts outshone the estimate of 1.31 million with 1.356 million. Earlier in the week, the US retail sales for August beat the expected (MoM) change of -0.2% with a change of 0.1%. On the other hand, the retail sales ex-autos missed the forecast of 0.2% with a change of 0.1%.
In the EU, the harmonised index of consumer prices for August posted a (MoM) change of 0.1% down from 0.2% in July, missing the forecast of 0.2%. The core harmonised index of consumer prices for the period matched the (YoY) forecast of 2.8%, the same as the preceding period.
The (MoM) also posted a similar change to July of 0.3%. Earlier in the week, the EU ZEW survey for economic sentiment for September fell short of 17.6 with a reading of 9.3. Germany’s equivalent for the period also missed 17.1 with 3.6.
EUR/USD Technical Analysis (the 60-min Chart)
Technically, the EUR/USD currency pair trades within a sideways channel formation in the 60-minute chart. However, the 14-hour RSI has recently pulled back to avoid rallying into overbought conditions.
Therefore, the bears will look to pounce on extended pullbacks at about 1.1056 or lower at 1.1011. On the other hand, the bull will look to pounce on rebounds at about 1.1149 or higher at 1.1190.
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 still seems to have room left to run before reaching overbought conditions.
Therefore, the bulls will be targeting extended gains at about 1.1222 or higher at 1.1343. On the other hand, the bears will look to pounce on pullbacks at about 1.0991 or lower at 1.0864.