- EUR/USD is consolidating within an ascending triangle, indicating a bullish trend.
- The upper limit of the ascending triangle and the psychological level at 1.0900 are likely to act as key resistance levels.
- The pair may test the lower limit of the ascending triangle and then the 21-day EMA at 1.0815.
EUR/USD fell to around 1.0850 during the Asian session on Wednesday. The pair faces challenges as the US Dollar (USD) strengthens amid risk-averse sentiment likely triggered by hawkish comments from Minneapolis Fed President Neel Kashkari. Kashkari’s comments suggest that interest rate hikes are still a possibility, signaling uncertainty regarding the deflation process, with only two rate cuts expected.
However, analyzing the daily chart, the EUR/USD pair is consolidating within an ascending triangle, which is indicating a bullish trend. Moreover, the 14-day Relative Strength Index (RSI) momentum indicator is just above the 50 level, further confirming this bullish trend.
The EUR/USD pair is likely to challenge the upper limit of the ascending triangle and then the psychological resistance level at 1.0900. A break above this level could see the pair heading towards the area around the critical level of 1.0950 and then approach the three-month high of 1.0981.
On the downside, the EUR/USD pair’s immediate support lies at the lower limit of the ascending triangle, followed by the 21-day exponential moving average (EMA) at 1.0815. A drop below the psychological level of 1.0800 could result in downward pressure towards the critical level around 1.0700.
