Recovery needs validation from 1.0910 hurdle, mid-tier EU catalysts and yields

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• EUR/USD picks up bids to refresh intraday high, bounces off six-week low.
• Pullback in Treasury bond yields, light calendar allow Euro bears to take a breather.
• Final prints of Eurozone inflation, ECB’s Lane eyed for clear directions.
• Convergence of 100-EMA, one-month-old descending trend line prods Euro buyers.

EUR/USD consolidates weekly losses by bouncing off a 1.5-month low to print the first daily gain in three. In doing so, the Euro pair benefits from the US Dollar’s retreat, amid a pullback in the Treasury bond yields, during the early hours of Friday. It’s worth noting a rebound in the RSI (14) line from the nearly oversold conditions also underpins the major currency pair’s latest rebound.

Even so, comparatively better US data and the looming recession risk for Germany join the sour sentiment to keep the Euro buyers in check ahead of the second-tier Eurozone data/events. Among them, the final readings of Eurozone inflation for July and a speech from the European Central Bank (ECB) Chief Economist Philip Lane will be crucial to follow.

Technically, a convergence of the 100-day Exponential Moving Average (EMA) joins a downward-sloping trend line from July 18 to highlight the 1.0910 as a strong upside hurdle for the EUR/USD bulls to cross to retake control. Additionally, the bearish MACD signals also challenge the Euro pair’s upside hopes.

In a case where the EUR/USD manages to cross the 1.0910 resistance confluence, the odds of witnessing a rally towards the 1.1000 psychological magnet and then to June’s top surrounding 1.1015 can’t be ruled out.

On the flip side, a four-month-old horizontal support zone near 1.0840-35 appears an immediate challenge for the EUR/USD sellers.

Following that, a convergence of the 200-day EMA and an upward-sloping trend line from March, close to 1.0800 at the latest, will be a tough nut to crack for the EUR/USD bears.

EUR/USD: Daily chart

Trend: Pullback expected