EURUSD is in selloff mode, forming lower highs and lower lows connected by a descending channel on its hourly time frame. Price is bouncing off the resistance and might be ready to resume the slide again.

Bears could aim for the nearby support levels at the channel bottom near the 1.0900 major psychological mark or the mid-channel area of interest at 1.0950. Technical indicators are pointing to a continuation of the slide.

The 100 SMA is below the 200 SMA to suggest that the path of least resistance is to the downside or that the selloff is more likely to gain traction from here. However, EURUSD has climbed above the moving averages, so these might hold as dynamic support on dips.

Stochastic is heading lower, so price could follow suit while bearish momentum is in play. RSI is also on the move down to suggest that selling pressure is present, and both oscillators have room to head down before reflecting exhaustion among sellers.

The dollar is on weak footing following Friday’s downbeat NFP release, as this lowers the odds of more interest rate hikes from the Fed. In turn, this could support overall economic activity, which then lifts risk-taking while traders grow less wary of recession risks.

US CPI and PPI readings are lined up this week, and these might still impact Fed tightening expectations. Chinese inflation data are also worth keeping tabs on, as downbeat readings could spur hopes of more PBOC stimulus and risk appetite.

Meanwhile, it’s also worth noting that the ECB has shifted to a less hawkish stance in their latest rate decision, which could also bring downside for the shared currency. Mid-tier economic data from the region has also been mostly downbeat last week, reinforcing the view that the central bank could keep rates on hold for their next decisions.