The EUR/USD pair is trading steadily around 1.1600 in late Asian hours on Tuesday, consolidating after pulling back from a more than two-week high at 1.1656. The pair is attempting to regain upward traction as the US Dollar (USD) struggles to extend its two-day rebound, with investors turning cautious ahead of Thursday’s US Nonfarm Payrolls (NFP) release for September.
The US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, is trading slightly lower near 99.45 at the time of writing. The USD had firmed over the past two sessions as markets pared back expectations for another Federal Reserve (Fed) rate cut this year.
According to the CME FedWatch Tool, the probability of a 25 bps Fed rate cut at the December meeting has fallen to 43%, down from 62.4% a week earlier.
In the Eurozone, a broad consensus among European Central Bank (ECB) policymakers favors keeping interest rates unchanged, with officials noting that risks to inflation and growth remain broadly balanced.
EUR/USD technical outlook
EUR/USD continues to encounter selling pressure near the downward-sloping trendline drawn from the September 22 high of 1.1818. The pair has pulled back toward the 20-day Exponential Moving Average (EMA), located near 88.70 in the provided data set.
The 14-day Relative Strength Index (RSI) is oscillating within the neutral 40.00–60.00 range, reinforcing expectations for continued sideways movement.
On the downside, key support levels are seen at the August low near 1.1400 and the June trough at 1.1347, should the pair slip below the October 9 low of 1.1542.
A move higher would bring the psychological 1.1700 level into view, followed by the October 17 high at 1.1728, if EUR/USD manages to break decisively above the recent two-week peak at 1.1656.
