The EUR/USD currency pair has been under the influence of various economic indicators and geopolitical events. One of the most anticipated data releases is the US inflation report, which traders believe could have a significant impact on the Federal Reserve’s monetary policy decisions. A hawkish stance from the Fed, indicating potential interest rate hikes, could bolster the US dollar, putting downward pressure on the EUR/USD. Conversely, a dovish sentiment might enhance the Euro’s appeal. Furthermore, global conflicts and their potential escalation always have the power to sway investor sentiment. Given that the Eurozone has its share of economic challenges, any adverse global event could push traders towards the perceived safety of the US dollar.
From a technical standpoint, the EUR/USD has been grappling with a descending trend line. While it has managed to stay within this trend for the past few sessions, it’s teetering on the edge. Currently trading below this trend line, the near-term outlook appears bearish. However, should the pair close above this trend, it might indicate a potential shift in momentum. On the upside, resistance is eyed at the 1.1075-1.1095 zone, marked by historical breakpoints and the 21-day Simple Moving Average (SMA). Beyond this, the 1.1100 psychological level looms large. If the bullish momentum continues, the pair might target the March 2022 high at 1.1185 or even the recent peak at 1.1275. On the flip side, immediate support is seen near the recent low of 1.1010, with the 55 and 100-day SMAs offering additional support around 1.1030.