• EUR/USD loses momentum near 1.0760 amid renewed USD demand.
• The pair keeps the bearish outlook unchanged below the key EMA; the RSI indicator lies below the 50-midlines.
• The first resistant level will emerge at 1.0790; the key support level is at 1.0700.

During Friday’s early European trading hours, the EUR/USD pair trades more softly. The major pair is impacted by the dovish remarks made by policymakers at the European Central Bank (ECB) and the resumed demand for the US dollar (USD). Currently trading at 1.0760, the EUR/USD is down 0.11% daily.

Francois Villeroy de Galhau, a member of the ECB Governing Council, stated on Friday that the central bank should immediately lower interest rates and will still have discretion over the rate and scope of policy easing following its initial action.

The four-hour chart shows that the key pair is below the 100-period Exponential Moving Averages (EMA), which supports the negative outlook for EUR/USD. The Relative Strength Index (RSI), below the 50-midlines and suggests that the path of least resistance is to the downside, supports the downward momentum.

 

Positively, the 100-period EMA and the upper Bollinger Band border will collide at 1.0790 to create the initial upward hurdle for the EUR/USD pair. If a bullish breakout is above this level, the market will rise to a high of 1.0885 on January 26. The next obstacle is at the psychological round figure of 1.0900, further north.

The major pair’s important support level is situated on the downside, close to a round mark and the low of February 13 at 1.0700. The bottom bound of the Bollinger Band, which is 1.0687, is another downside filter to keep an eye on. A breach of the latter will reveal a low of 1.0660 on November 9.

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EUR/USD four-hour chart

Conclusion

As we continue to navigate the intricacies of the EUR/USD market, the bearish trend below the 1.0770 level remains resolute. Both technical and fundamental analyses align in forecasting continued downward pressure on the pair, reflective of the broader economic and geopolitical narratives.

For traders, this means exercising both patience and precision. Keeping a watchful eye on critical support and resistance levels, understanding the influence of technical indicators, and staying abreast of the latest fundamental developments are key to crafting a successful trading approach.

While the immediate outlook for the EUR/USD pair points towards sustained bearishness, the forex market is known for its fickleness, often swayed by unexpected events. Therefore, staying adaptable and flexible in your trading strategies is fundamental. Remember, the key to successful trading in the forex market lies in a combination of astute analysis, risk management, and flexibility to the ever-changing market conditions.

The prolonged downturn for the EUR/USD pair signals that further short-term consolidation or bearish moves are likely. Nonetheless, vigilant traders who are well-prepared to capitalize on these downward movements can still find success in the market. The trader’s adaptability and dedication to continuous learning are the heaviest when navigating the currency exchange landscape.