EUR/USD Forecast: Euro could weaken further ahead of the weekend

• EUR/USD has struggled to gain traction after dropping below 1.0900.
• The positive impact of the ECB's hawkish meeting accounts on the euro remained short-lived.
• Ahead of the first round of the French presidential election, the pair could stay on the back foot.

EUR/USD has faced renewed bearish pressure during the Asian session on Friday after having moved sideways above 1.0900 on Thursday. The pair remains technically oversold but it could have a difficult time staging a correction ahead of the weekend.

The European Central Bank's March Monetary Policy Meeting Accounts revealed on Thursday that a large number of members held the view that the current high level of inflation and its persistence called for immediate further steps towards monetary policy normalisation. "It was nonetheless seen as wise to keep some two-sided optionality," the publication further read.

Although the shared currency showed some resilience against its rivals on the ECB's hawkish tone, the dollar regathered its strength on Fedspeak and didn't allow EUR/USD to gather recovery momentum. St Louis Fed President James Bullard argued on Thursday that they would need to lift the policy rate toward 3.5% this year to tame inflation. Atlanta Fed President Raphael Bostic and Chicago Fed President Charles Evans both reiterated that it would be appropriate to move the policy to a neutral level by the end of the year.

Meanwhile, investors might opt to remain on the sidelines ahead of the first round of the French presidential election, which will take place on Sunday, April 10. The latest polls show that Marie Le Pen has closed the gap to Emmanuel Macron. It's difficult to say how the shared currency's valuation will be affected in the long term by the outcome of the election but investors could price in a political risk premium in the near term and force EUR/USD to stay on the back foot.

EUR/USD Technical Analysis

EUR/USD continues to trade below the descending trend line coming from late March. The Relative Strength Index (RSI) indicator on the four-hour chart stays near 30 but the pair is unlikely to make a steady correction as long as that line stays intact.

1.0850 (static level) aligns as first support. In case that level turns into resistance, the pair could extend its slide toward 1.0800 (psychological level).

On the upside, 1.0880 (trend line) acts as immediate resistance ahead of 1.0900 (psychological level, 20-period SMA) and 1.0950 (former support, static level).