During the early European session, the EUR/USD pair dipped below the psychological support level of 1.1000. The major currency pair is anticipated to display further weakness as the US Dollar Index (DXY) targets an upside above the immediate resistance of 101.50, ahead of the US inflation data release.
Preliminary reports suggest that US inflation is likely to remain steady, with lower credit from commercial banks due to weak demand and tight credit conditions being offset by higher household earnings.
Conversely, the Eurozone economy is rapidly approaching a recession, as retail demand continues to decline and the growth rate contracts sharply, largely due to the European Central Bank's (ECB) higher interest rates.
After reaching its annual high of 1.1096, the EUR/USD is exhibiting a notable loss in upside momentum and is struggling to stay above the horizontal resistance drawn from the February 02 high at 1.1033. The 20-period Exponential Moving Average (EMA) at 1.0983 is currently offering support to the Euro.
The Relative Strength Index (RSI) (14) oscillating within the 40.00-60.00 range signals a lacklustre performance in the near future.
If the asset breaks below the May 02 low at 1.0942, a downward movement of the US Dollar will pull the asset towards the April 12 low at 1.0915 and the April 10 low at 1.0837.
On the other hand, if the asset recovers and moves above the April 26 high of 1.1095, it will pave the way for a fresh 13-month high at 1.1185, followed by the round-level resistance at 1.1200.
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