Finds cushion around 1.0520 ahead of EU Inflation and US NFP
- A decent recovery in S&P500 futures indicates that the risk-on profile has regained traction.
- Investors are awaiting the release of the Eurozone Inflation and US NFP for fresh impetus.
- The RSI (14) has shifted into the bearish range, which indicates that the downside momentum has been triggered.
The EUR/USD pair has displayed a rebound move after gauging an immediate cushion around 1.0520. It would be prudent not to consider it a reversal for now as volatility is likely to remain on a lower note ahead of the release of the United States Nonfarm Payrolls (NFP) data and Eurozone Inflation for fresh cues.
The risk-on profile has gained traction amid a decent recovery in risk-sensitive assets like S&P500 futures. Meanwhile, the US Dollar Index (DXY) is struggling to surpass its crucial resistance around 104.80.
A bearish trend led by the formation of lower highs and lower lows is clear on an hourly scale. Earlier, the 200-period Exponential Moving Average (EMA) at 1.0610, which was acting as major support for the shared currency has turned into a major hurdle for the latter.
Also, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which indicates that the bearish momentum has been activated.
Should the major currency pair break below Thursday’s low at 1.0515, US Dollar will get strengthened and will drag the asset towards December 8 low at 1.0490 followed by December 7 low at 1.0443.
Alternatively, a decisive move above Wednesday’s high at 1.0643 will drive the asset towards December 30 high at 1.0713. A break above the latter will support EUR/USD to recapture its seven-month high at 1.0736.
EUR/USD hourly chart