Technical Analysis: EURUSD sellers attack key support ahead of US inflation data, budget

Technical Analysis: EURUSD sellers attack key support ahead of US inflation data, budget

Cautious markets drag EURUSD to a two-month-old support line, adjacent to 100-SMA, during early Friday. Behind moves are doubts over the US inflation and stimulus as the Fed’s preferred gauge of inflation, Core PCE Price Index and annual budget are both up for release. That said, bearish MACD and nearly oversold RSI conditions also generate uncertainty on the technical side. Even so, the pair bulls seem tired amid upbeat US Treasury yields, which in turn could offer a nice short opportunity once EURUSD drops below 1.2157. To validate the south-run towards the monthly low near 1.2017, after 1.2157 breakdown, the bears should wait for a clear break below April’s top near 1.2149.

Alternatively, the corrective pullback will be tested by the 1.2200 threshold and 1.2240 resistance before directing EURUSD buyers toward the monthly top, also the highest since late January, around 1.2265. In a case where the pair remains firm above 1.2265, 2020-end tops near 1.2310 can act as an intermediate halt before fueling the prices toward the yearly top of 1.2348. To sum, EURUSD remains on the bull's radar despite the latest pullback moves.

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