Rebounds from over one-week low, moves back above mid-1.0900s

• EUR/USD regains positive traction on Wednesday and snaps a three-day losing streak.
• A modest USD downtick lends support ahead of the US macro data and FOMC minutes.
• A convincing break below the 50% Fibo. might shift the bias in favour of bearish traders.

The EUR/USD pair attracts some buying during the Asian session on Wednesday and for now, seems to have snapped a three-day losing streak to over a one-week low touched the previous day. Spot prices currently trade around the 1.0960 region, up just over 0.15% for the day, and remain at the mercy of the US Dollar (USD) price dynamics.

The USD Index (DXY), which tracks the Greenback against a basket of currencies, erodes a part of Tuesday’s strong gains amid some repositioning trade ahead of important US macro data and the crucial FOMC meeting minutes. In the meantime, doubts over early rate cuts by the Federal Reserve (Fed) might hold back traders from placing aggressive bearish bets around the buck and keep a lid on any further gains for the EUR/USD pair.

From a technical perspective, spot prices showed some resilience below the 100-period Simple Moving Average (SMA) on the 4-hour chart and found decent support near the 50% Fibonacci retracement level of the December 11-28 rally. The latter is pegged near the 1.0940 area and should now act as a key pivotal point, which if broken should pave the way for an extension of the pullback from the 1.1135-1.1140 area, or a five-month peak touched last week.

The EUR/USD pair might then weaken below the 200-period SMA on the 4-hour chart, currently around the 1.0920 region, and the 1.0900 mark, towards testing the 61.8% Fibo. level, around the 1.0885-1.0880 zone. Some follow-through selling will be seen as a fresh trigger for bearish traders and drag spot prices further towards the 1.0835-1.0830 intermediate support en route to the 1.0800 round-figure mark and the 1.0765-1.0760 region.

Meanwhile, oscillators on the daily chart – though have been losing traction – are still holding in the positive territory and favour bullish traders. That said, any further intraday move-up is likely to confront some resistance near the 1.0980 area. This is closely followed by the 1.1000 psychological mark, above which the EUR/USD pair could climb to the 1.1040-1.1045 region en route to the 1.1080-1.1085 zone before aiming to reclaim the 1.1100 round figure.

EUR/USD 4-hour chart

Technical levels to watch