EUR/USD Holds Firm Above Critical 200-DMA Support; PCE Data Eyed for Direction
Technical Analysis:
EUR/USD displayed resilience on Friday, staging a modest recovery after marking a fresh 10-session low at 1.0795 during the European session. The pair opened in New York trading near 1.0840, briefly rallying to an intraday high of 1.08613 before renewed selling pressure emerged amid widening German-U.S. yield spreads, softer equities, and falling gold prices. Technical sentiment remains cautiously neutral, with immediate bearish momentum tempered by strong buying interest evident near the psychologically significant 1.0800 level.
The short-term technical picture reflects mixed signals: daily RSI is tilting downward, suggesting weakening bullish momentum in the immediate term, yet monthly RSI continues to trend higher, indicating that the longer-term bullish structure remains intact. The pivotal technical support at the 200-day moving average around 1.0760/70 has repeatedly proven robust, underpinning EUR/USD on multiple recent pullbacks. A clear break below this key zone would be needed to shift sentiment decisively bearish and potentially expose deeper retracement toward the February lows near 1.0700.
In the immediate horizon, directional clarity hinges significantly on upcoming U.S. February PCE inflation data, scheduled for release on March 28. Should this key inflation metric meet or undershoot market expectations, EUR/USD could quickly regain bullish momentum, targeting a break back above immediate resistance at Friday’s high near 1.0860. Such a move would confirm consolidation is ending and reinitiate the bullish bias, opening upside targets toward the psychological 1.0900 mark, and potentially retesting the recent peak near the critical Fibonacci resistance at 1.0950.