06 Jan 2025

• • EUR/USD drifts lower to around 1.0315 in Monday’s early European session. 
  • The negative view of the pair prevails below the 100-day EMA with the bearish RSI indicator. 
  • The initial support level is seen at 1.0267; the immediate resistance level to watch is 1.0458.
  • The EUR/USD pair has declined to approximately 1.0315 during the early hours of the European session on Monday. The anticipation of further interest rate cuts by the European Central Bank (ECB) this year is exerting downward pressure on the Euro (EUR) against the US Dollar (USD). Later in the day, market participants will look for additional insights from the Eurozone HCOB Composite Purchasing Managers’ Index (PMI) and the preliminary German Consumer Price Index (CPI) data for December.
    
    From a technical perspective, the bearish sentiment surrounding EUR/USD continues to prevail, as the pair remains constrained below the significant 100-day Exponential Moving Average (EMA) on the daily chart. Additionally, the downward trend is reinforced by the 14-day Relative Strength Index (RSI), which is positioned below the midpoint at approximately 35.90, indicating that the prevailing direction is likely to be downward.
    
    The lower boundary of the Bollinger Band at 1.0267 serves as an initial support level for the pair. A decisive breach of this level could lead to a test of the 1.0200 mark. Further declines may encounter support at 1.0160, which represents the low recorded on August 8, 2022.
    
    Conversely, the first resistance level for EUR/USD is identified at 1.0458, the peak from December 30. A sustained move above this threshold could facilitate a rise towards 1.0550, the upper limit of the Bollinger Band. Continued upward momentum may encounter further resistance at 1.0663, corresponding to the 100-day EMA.