EUR/USD Analysis: Maintains Below 1.0800 Ahead of German and Eurozone Services PMI Data

The EUR/USD pair faces selling pressure around 1.0780 amid a stronger USD, influenced by hawkish comments from Federal Reserve (Fed) Chairman Jerome Powell. The pair remains in a bearish outlook, trading at 1.0780, down 0.11% for the day during the early European session.

Powell’s statements on Sunday emphasized that a March rate cut is premature, citing the need for more confidence before initiating such a significant step. The technical analysis supports the bearish stance, with EUR/USD positioned below the crucial 100-period Exponential Moving Averages (EMA) on the four-hour chart. The downward slope on the chart aligns with the tower momentum observed in the Relative Strength Index (RSI) below the 50 midlines, indicating a prevailing downside bias.

Looking ahead, market participants await the Services PMI data from Germany and the Eurozone for potential catalysts. The immediate resistance level for EUR/USD is anticipated near the 50-period EMA at 1.0840, followed by the 100-period EMA at 1.0865. A decisive break above may lead to a challenge at 1.0900, marked by the upper boundary of the Bollinger Band and a psychological milestone. Further upside barriers include the high of January 15 at 1.0967, with a notable level at the psychological round figure of 1.1000.

Conversely, initial support rests near the lower limit of the Bollinger Band at 1.0752. A breach could expose the December 8 low at 1.0723, progressing towards the November 9 low at 1.0660.

EUR/USD four-hour chart

EUR/USD