The EUR/USD currency pair has experienced a decline, hovering around 1.0315 during the early trading hours in Europe on Monday. This downward trend is largely attributed to expectations that the European Central Bank (ECB) may implement additional interest rate cuts this year, which is exerting pressure on the EURO (EUR) against the US Dollar (USD). Market participants are closely watching forthcoming economic indicators, including the Eurozone HCOB Composite Purchasing Managers’ Index (PMI) and preliminary German Consumer Price Index (CPI) data for December.
From a technical perspective, the EUR/USD ’s bearish trajectory persists, primarily constrained below the critical 100-day Exponential Moving Average (EMA). The 14-day Relative Strength Index (RSI) also indicates bearish momentum, sitting below the neutral threshold at approximately 35.90. This suggests that the prevailing trend is leaning towards further declines in value.
The initial support for the pair is positioned at the lower limit of the Bollinger Band, around 1.0267. Should the exchange rate break beneath this level, it may lead to a test of the 1.0200 level, with additional support further down at 1.0160, which represents a low from August 8, 2022.
Conversely, if the EURO manages to rally, the first area of resistance to monitor is at 1.0458, the high recorded on December 30. A consistent move above this level could challenge the 1.0550 threshold, which is the upper boundary of the Bollinger Band. Further gains might push the currency pair towards the 1.0663 level, where the 100-day EMA is situated. Overall, traders will continue to navigate these technical levels as they assess the EURO ’s outlook amid ongoing economic developments.
