EURUSD pares the biggest daily loss in 13 months near key support on ECB day
Wednesday’s strong US inflation data and hawkish Fed Minutes portrayed the EURUSD pair’s biggest daily slump since March 2023. Even so, the Euro pair failed to conquer a five-month-old rising support line, close to 1.0730 by the press time. The inability to break important support joins the market’s consolidation ahead of the European Central Bank (ECB) Interest Rate Decision to trigger the quote’s corrective bounce. However, the below 50.00 status of the RSI (14) line joins the bearish MACD signals to challenge the bullish bias, which in turn highlights the aforementioned 1.0730 support for the sellers to watch. Following that, the yearly low of 1.0695 and the mid-November 2023 bottom surrounding 1.0655 will act as the final defenses of the bulls.
On the contrary, a 50% Fibonacci retracement of the pair’s October-December 2023 upside, close to 1.0795, quickly followed by the 1.0800 threshold, cap the immediate upside of the EURUSD. Even if the quote manages to remain firmer past 1.0800, 200-SMA and 100-SMA will challenge the Euro buyers around 1.0830 and 1.0870 respectively. It’s worth noting that the pair’s upside past 1.0870 remains inconclusive for the bulls unless crossing a downward-sloping resistance line stretched from December 2023, near 1.0900 threshold at the latest.
To sum up, the EURUSD pair consolidates heavy losses ahead of the key ECB event, as well as the US PPI data. However, the bullish bias appears less convincing below 1.0900, especially when the ECB is likely to announce a dovish halt.
