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Struggle with SMA 21 Days Continues Ahead of US Inflation Data

  • EUR / USD closed below the 21-day SMA on Thursday, a caution for the bulls.
  • Cautious sentiment, the ECB and firmer Treasury yields weigh on the pair.
  • The decline looks more convincing, with the 1.1242 support likely at risk.

EUR / USD is seeing some selling pressure as it trades below 1.1300 during the European session on Friday, as bears extend control amid a rally in Treasury yields and risk aversion.

The monetary policy divergence between the Fed and the ECB remains negative for the pair, especially after the ECB plans to push its regular asset purchase program (APP) at the monetary policy meeting next week.

Meanwhile, the latest rally in yields is propelling the USD higher, putting additional downward pressure on the EUR / USD ahead of the release of US inflation data.

Technically, the pair is moving defensively below the 21-day moving average at 1.1302 after Wednesday’s close below it.

The 14-day RSI remains below the 50 level, keeping pa bears cheerful.

Any rebound in momentum to the downside could put the trend line support at 1.1242 at risk.

A daily close below that region will expose the 1.1200 level. The next stop for the bears is at the yearly lows of 1.1185.

EUR / USD daily chart

On the other hand, acceptance above the 21 SMA will point to a test of the psychological level of 1.1350.

Higher up, buyers could be expecting a move towards the round 1.1400 level.

EUR / USD additional levels


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