The single currency had been under pressure due to soft EU inflation statistics that prompted a near 0.8% drop on Thursday. This downward movement came after the euro failed twice to breach the key psychological level of 1.10, finding some support at a Fibonacci retracement mark of 1.0882. Despite the modest rebound, the euro remains under near-term pressure while trading below the crucial threshold of the daily chart’s 10-day moving average (10DMA) at 1.0926.
Traders are keeping a close eye on further pivotal levels, particularly at 1.0818/00, which includes the weekly cloud top and a Fibonacci retracement zone. A decisive break below the Fibonacci resistance at 1.0559 would confirm a bear-trap scenario on the weekly timeframe, which could increase the downside risks for the euro.
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