EURUSD made a couple of failed attempts to break below the 1.0850 minor psychological mark and is now testing resistance around the 1.0900 major psychological level.

A break above this double bottom neckline could set off a climb that’s the same height as the formation or around 50 pips. Price has yet to break past the 200 SMA dynamic resistance to confirm a rally, though.

On the subject of moving averages, the 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that the selloff is more likely to gain traction than to reverse. The gap between the moving averages is also widening to reflect strengthening selling pressure.

Stochastic has been indicating overbought conditions for quite some time, so heading south would signal that bearish pressure is returning. This might take EURUSD back down to the bottoms or lower.

RSI has some room to climb before reflecting exhaustion among buyers, so price might keep following suit while the oscillator moves higher.

EURUSD could take cues from the ECB decision later in the week, although the central bank is widely expected to keep policy unchanged and refrain from giving forward guidance. Data has been mostly weak, but other fiscal factors might be enough to keep inflation trends within target so policymakers might find it prudent to stand pat.

Meanwhile the dollar could take cues from the US advance GDP figure, which is slated to show a slower pace of expansion for Q4 2023, and the core PCE price index. Slightly higher price pressures are eyed, but this might not be enough to dampen rate cut prospects for later in the year.

Eurozone and US PMI figures are also up for release and might bring volatility for EURUSD since these leading indicators could also help determine what’s next for policy.