EUR/USD Analysis: Bulls struggling to capitalize on the move above 1.0900 mark

• EUR/USD struggled for a firm direction and settled nearly unchanged on Wednesday.
• Falling US bond yields undermined the USD and helped gain some traction on Thursday.
• Investors now look forward to important US macro data for some meaningful impetus.

The EUR/USD pair had some good two-way price moves on Wednesday and finally settled nearly unchanged for the day, forming a classic Doji candlestick on the daily chart. The pair built on its recent recovery and the initial leg of the intraday uptick was supported by some follow-through US dollar selling. The shared currency got an additional boost, lifting the pair to two-week tops no news that Germany's Finance Minister is considering to ease fiscal spending restrictions in order to help local governments and boost its flagging economy.

The pair climbed back above the 1.0900 round-figure mark, albeit struggled to capitalize on the move, rather met with some fresh supply at higher levels amid growing fears over the spread of the coronavirus in Europe. This coupled with a late pickup in the USD demand – supported by a modest bounce in the US Treasury bond yields – further collaborated to the pair's slide to an intraday low level of 1.0855. However, some renewed weakness in the US equity markets led to another leg down in the US bond yields and kept a lid on the USD uptick, which eventually helped the pair to rebound around 25-30 pips from lows.

The prevailing risk-off mood dragged the yield on the benchmark 10-year US government bond to fresh all-time lows and kept the USD bulls on the defensive through the Asian session on Thursday. The pair managed to regain traction and was last seen trading near fresh two-week tops, thought still seemed struggling to build on the momentum convincingly beyond the 1.0900 mark. Moving ahead, market participants now look forward to the Eurozone Consumer Confidence and Industrial Confidence data for February for some short-term impetus.

Later during the early North-American session, a slew of important US macro data will influence the USD price dynamics and further contribute towards producing some meaningful trading opportunities. Thursday's US economic docket highlights the release of the first revision of the Q2 GDP growth figures, along with the durable goods orders data for January and the usual initial weekly jobless claims.

Short-term technical outlook

From a technical perspective, the fact that the pair has just managed to hold its neck above the 1.0900 mark (38.2% Fibonacci level of the 1.0941-1.0778 downfall) points to for some additional gains. However, the lack of some strong follow-through warrants some caution before placing any aggressive bullish bets. Any subsequent positive move is likely to confront some fresh supply near the 1.0935 region (50% Fibo.), above which the pair is likely to aim towards reclaiming the key 1.10 psychological mark with some intermediate hurdle near the 1.0970 area (61.8% Fibo.).

On the flip side, the 23.6% Fibo. level, around the 1.0855-50 region, now seems to have emerged as immediate support, which if broken might negate prospects for any further near-term recovery. The pair then might accelerate the fall back towards challenging the 1.0800 round-figure mark before eventually dropping to test the lower end of over one-year-old descending trend-channel, currently near the 1.0760-55 region.