EUR/USD On The Backfoot Near 1.1000 As US Dollar Gains Strength
The EUR/USD pair is showing signs of weakness and appears to be clinging near the 1.1000 support during the early European session.
Overall, the market food is very mixed as the US Dollar appears to be sustaining its recent recovery. Looking ahead, the speeches from the Fed policymakers and the ECB officials are also on the dockets.
EUR/USD Remains Sideways
Earlier, the EUR/USD failed to close above 1.1050 and showed further weakness during the US trading session. To say that the EUR/USD pair remained sideways wouldn't be wrong.
The 4-hour chart of EUR/USD reveals that all the major indicators are tilted towards the downside. Especially the RSI indicator is below 50, which indicates the EURO weakness but USD strength.
In addition, the EUR/USD is trading below the 20 SMA and appears to be approaching the 1.1000 level. According to experts, the negative tone surrounding the EUR/USD will remain in effect as long as it trades below 1.1030.
But if the EURO shows strength and pushes the EUR/USD pair above 1.1050, it will be a sign of strength!
For the most part, the gains will remain limited unless we cross the 1.1100 level. But if we get a daily close above the 1.1100 level, it would lead to a more bullish trend in the medium term.
On the other hand, a close below the 1.0970 level would be an indication of more bearish pressure and further correction down the road. In this case, the next important support for the EUR/USD pair will be 1.0930 and 1.0910.
For now, the experts believe that the EUR/USD will show more weakness as the DXY is showing a promising upside. In addition, if the DXY manages to cross the 101.50 resistance, it would mean more trouble for the EURO.
Looking ahead, there's the US inflation report, and the market is expecting it to remain steady. But if the inflation turns lower, then the Fed will have less reason to hike rates which would be bad for the USD!