The EUR/USD currency pair is currently experiencing a challenging trading environment, as it eases from a fresh weekly high. On Thursday, the pair extended its weekly advance to 1.0439, yet soon after retreated back to the 1.0400 area. This pullback comes ahead of upcoming US economic data releases, leaving the pair in a precarious position. Trading within wide intraday ranges since Wednesday, the EUR/USD battles to maintain momentum amid fluctuating market conditions.
The pair is currently contending with a mildly bullish 20 Simple Moving Average (SMA) around its present level. A bullish 20 SMA offers support at approximately 1.0350, but the longer moving averages continue to head firmly south above the 1.0500 mark. This indicates that sellers retain control. Despite managing to advance beyond all its moving averages, the EUR/USD struggles to hold above a flat 100 SMA, suggesting persistent volatility.
The recent movements of the EUR/USD have been influenced by various market factors. Earlier in the day, upbeat UK data contributed to strong gains for the pair. However, subsequent losses have tempered these advances. The US Dollar is under mild pressure despite expectations of a more hawkish Federal Reserve, which has further complicated the trading landscape.
On Wednesday, the release of the US January Consumer Price Index (CPI) temporarily boosted the USD, adding another layer of complexity to the dynamics of the EUR/USD pair. As of now, the EUR/USD hovers around 1.0390, just 10 pips above its previous daily close, indicating a lack of significant upward momentum.
The Momentum indicator also points south within negative levels, undermining potential bullish outlooks. A break through the critical 1.0350 price zone would likely favor a steeper leg lower in upcoming sessions. This threshold acts as a crucial support level that, if breached, could signal further declines for the EUR/USD.
Resistance levels for the pair are identified at 1.0440, 1.0480, and 1.0530. These levels present hurdles that buyers must overcome to regain control and drive prices higher. However, current market indicators suggest that this may be a challenging task without substantial positive catalysts.