EUR/USD News - The EUR/USD currency pair is currently consolidating after experiencing a sharp decline last night, reaching its lowest level in two and a half weeks. In the Asia session on Friday, it is trading within a narrow range, just below the psychological level of 1.1000.

The US dollar (USD) has managed to maintain strong gains from the previous day, reaching its highest level since July 11. This strength is supported by optimistic US economic data, which increases the likelihood of a future interest rate hike by the Federal Reserve (Fed).

However, the euro (EUR) is under pressure as the European Central Bank (ECB) has not provided clear forward guidance on the measures it will take, raising the possibility of a pause in September. This situation makes traders hesitant to place bullish bets on the EUR/USD pair, creating a barrier to upward movement.

From a technical analysis perspective, there was a break through a strong resistance level that became a support level at 1.1050 yesterday. This breakout is viewed as a new trigger for bearish traders. However, the subsequent decline was halted just before reaching the 50% Fibonacci retracement level of the upward movement that occurred between May and July.

Support has been established around the mid-1.0900s level, serving as an important point. If this level is decisively broken, it would open up the possibility of a deeper decline.

Going forward, the EUR/USD pair is likely to test the 100-day Simple Moving Average (SMA) around the 1.0900 level before continuing its decline toward the 61.8% Fibonacci level, which is in the 1.0880-1.0875 zone.

On the other hand, the psychological level of 1.1000 currently acts as an immediate barrier before reaching the 38.2% Fibonacci level, which is around the 1.1030 region. If the EUR/USD pair can sustain a rise beyond this hurdle, it could trigger a short-covering rally and open up the possibility for the pair to reach back towards the 1.1100 mark.

Further upward movement may continue, although there is a risk of a quick failure around the 1.1125 region, which is the 23.6% Fibonacci level. Beyond that, there is also the previous session's swing high level, which, if broken, would shift the bias in favor of market participants positioned as "bulls" and open opportunities for further movement above the 1.1200 mark. If that occurs, this currency pair could potentially retest the recent highs around the 1.1275 area.

Warning!

This analysis is based on insights from fundamental and technical perspectives from reliable sources and does not constitute advice or an invitation. Always remember that this content aims to enrich readers' information. Always conduct independent research regarding other forex information to serve as a reference for your trading.

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