The EUR/USD currency pair is currently grappling with bearish momentum, as indicated by technical readings on the daily chart. Factors such as disappointing UK GDP and industrial figures for November have contributed to the pair's struggles, leading it to trade below all its moving averages. As of Thursday, the pair has been hovering just below the 1.0300 mark, signaling a lack of investor confidence in taking long positions on the euro.
Technical analysis reveals that the 20 Simple Moving Average (SMA) is providing dynamic resistance around the 1.0340 level, which is also acting as a key resistance threshold. Meanwhile, the 100 SMA is accelerating downwards below the 200 SMA, both of which are situated significantly above the current price level. This positioning underscores the bearish sentiment surrounding the pair. The immediate support lies at the intraday low of 1.0260, with further support expected at the 1.0210 price zone.
In the near term, the EUR/USD pair remains neutral, according to insights from the 4-hour chart. The 20 SMA offers support around the current trading levels, while advances are capped by a bearish 100 SMA at 1.0340. Despite technical indicators turning lower, they remain within neutral territories and lack clear directional strength. This suggests that any significant movements of the pair might remain constrained unless there is a decisive break below 1.0260, which could lead to a retest of the yearly low.
The recent economic data from the UK has further exacerbated the pair’s position. The sluggish GDP growth and industrial figures cast a shadow over market sentiment, providing headwinds for the euro against its US counterpart. Without any compelling reasons for investors to add long positions on the euro, the pair continues to face downward pressure.
The EUR/USD's current trading position, below the 1.0340 resistance level, further highlights the challenges it faces in breaking out of its bearish trend. This resistance level aligns with the 20 SMA, reinforcing its role as a significant barrier that needs to be overcome for any potential upward movement.