EUR/USD came under renewed bearish pressure and dropped to a fresh 2023 low below 1.0550 after the data from the US showed that PCE inflation rose at a stronger pace than expected in January. The pair remains on track to post its lowest weekly close since early December.

The daily chart shows the EURUSD pair heading south, deep in thick daily Ichimoku cloud, with bearishly aligned studies adding to prospect of further weakness.

Bears eye initial support at 1.0544 (daily cloud base), break of which would unmask next key levels at 1.0483/60 (2023 low, posted on Jan 6 / Fibo 38.2% of 0.9535/1.1032 ascend).

Meanwhile, bears may take a breather for consolidation, as stochastic is oversold and 14-d momentum bounced, but remaining in the negative territory.

In such configuration, limited upticks, which would offer better levels to re-join bearish market, would be likely scenario.

Falling 10DMA (1.0663) and broken Fibo 23.6%, reverted to resistance (1.0679), should ideally cap extended upticks and guard upper pivot at 1.0742 (daily cloud top).The mid-point of the descending regression channel coming from early February aligns as initial resistance at 1.0600. Once EUR/USD stabilizes above that level, it could stretch higher toward 1.0630 (static level, 20-period Simple Moving Average (SMA) on the four-hour chart) and 1.0650/60 (upper-limit of the channel, static level, 50-period SMA).

In case 1.0600 continues to act as resistance, sellers could continue to dominate the pair's action. In that scenario, 1.0570 (static level from December) could be seen at the next bearish target before 1.0540 (lower-limit of the descending channel).

EURUSD to provide reversal from 1.0540-1.04938

Feb 24 2023