The EUR/USD currency pair on Wednesday pulled back off the session highs of about 1.0929 to trade at about 1.0893. The currency pair continues to trade within an ascending channel formation in the 60-minute chart.
The pair has now fallen to trade closer to 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 is trading at the back of a relatively busy period in both markets. On Wednesday, Germany’s preliminary HCOB Manufacturing PMI for January beat the estimate of 43.7 with a reading of 45.4. The HCOB composite and services PMIs missed 47.8 and 49.5, respectively with readings of 47.1 and 47.6.
On the other hand, the EU’s preliminary HCOB Manufacturing PMI outshone the estimate of 44.8 with a reading of 46.6, while the HCOB services and composite PMIs for the period fell short of 49 and 48, respectively with 48.4 and 47.9.
In the US, the preliminary S&P Global Manufacturing PMI for January exceeded the expectation of 47.9 with a reading of 50.3, while the Services PMI beat 51 with 52.9. On the other hand, the preliminary S&P Global Composite PMI improved to 52.3 up from 50.9 in the previous period.
Earlier in the week, the US Richmond Fed Manufacturing Index for January missed a reading of -7 with a reading of -15.
EUR/USD Technical Analysis (the 60-min Chart)
Technically, the EUR/USD currency pair appears to be trading within an ascending 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 be targeting extended pullbacks at about 1.0858 or lower at 1.0825. On the other hand, the bulls will look to pounce on rebounds at about 1.0929 or higher at 1.0964.
EUR/USD Technical Analysis (the Daily Chart)
In the daily chart, the EUR/USD currency pair appears to be trading within a descending channel formation. The 14-day RSI also seems to be edging closer to the oversold conditions.
Therefore, the bears will be looking to rice the current wave of declines toward 1.0785 or lower to 1.0645. On the other hand, the bulls will be targeting long-term rebounds at about 1.1004 or higher at 1.1143.