During Wednesday’s Asian session, the EUR/USD pair experienced continued losses, nearing the 1.0850 mark. The pair encounters challenges as the US Dollar (USD) strengthens amidst emerging risk aversion sentiment, potentially catalyzed by hawkish comments from Minneapolis Fed President Neel Kashkari. Kashkari’s remarks hint at the possibility of rate increases and express uncertainty regarding the disinflationary process, projecting only two rate cuts.
Despite these headwinds, an analysis of the daily chart reveals a bullish bias for the EUR/USD pair, as it consolidates within the confines of an ascending triangle pattern. Moreover, the 14-day Relative Strength Index (RSI) momentum indicator sits slightly above the 50 level, lending further credence to this bullish stance.
In light of these technical indicators, the EUR/USD pair may seek to challenge the upper boundary of the ascending triangle, with the psychological resistance level at 1.0900 acting as an initial target. A breakthrough above this level could propel the pair towards the region surrounding the significant level of 1.0950, potentially culminating in a test of the three-month high at 1.0981.
Conversely, immediate support for the EUR/USD pair is anticipated at the lower boundary of the ascending triangle, followed by the 21-day Exponential Moving Average (EMA) situated at 1.0815. A breach below the psychological support level of 1.0800 may exert downward pressure, potentially guiding the pair towards the vicinity of the significant level at 1.0700.
