EUR/USD Forecast: No convincing signs of a reversal yet

• EUR/USD has been having a hard time gathering recovery momentum.
• The pair could come under renewed bearish pressure with a drop below 1.1320.
• Investors await ECB Meeting Accounts and mid-tier data releases from the US.

EUR/USD has been struggling to attract bulls following Wednesday's modest rebound and the near-term technical outlook doesn't offer any convincing signs of a reversal yet. Although the pair could benefit from risk flows, its upside is likely to remain limited. 

In the absence of high-tier macroeconomic data releases on Wednesday, the greenback lost some interest with the 10-year US Treasury bond yield retreating from the two-year high it set at 1.9%. There is a positive shift witnessed in the market mood early Thursday, which could limit the dollar's gains for the time being. The S&P Futures and the Nasdaq Futures are up 0.55% and 0.75%, respectively, in the European morning.

Later in the session, the European Central Bank (ECB) will release the December Policy Meeting Accounts. Markets already know that the ECB will end its Pandemic Emergency Purchase Programme (PEPP) in March and boost the Asset Purchase Programme (APPI) in the second and third quarters of the year.

Investors will pay close attention to policymakers' comments on the inflation outlook. Following the December policy meeting, ECB President Christine Lagarde refrained from outright dismissing the possibility of a rate increase toward the end of the year. In case the publication shows that some ECB members keep an open mind about a rate hike in 2022, the shared currency could outperform the dollar, at least in the short term. 

In the second half of the day, December Existing Home Sales, weekly Initial Jobless Claims and Philadelphia Fed Manufacturing Survey will be featured in the US economic docket. Earlier in the week, the NY Fed's Empire State Manufacturing Index missed the market expectation by a wide margin and caused the dollar to lose interest. If Thursday's data disappoint, a similar market reaction would be witnessed and vice versa.

EUR/USD Technical Analysis

EUR/USD seems to have gone into a consolidation phase near 1.1350, where the 100-period SMA on the four-hour chart and the Fibonacci 61.8% retracement of the latest uptrend align. In case this level turns into support, the pair could target 1.1380 (Fibonacci 50% retracement) and 1.1400 (Fibonacci 38.2% retracement).

Meanwhile, the lack of bullish momentum is mirrored by the Relative Strength Index (RSI) indicator, which stays below 50 despite the fact that five of the last four-hour candles closed in the positive territory. 

On the downside, the 200-period SMA forms dynamic support near 1.1320. With a decline below that level, additional losses toward 1.1300 (psychological level) and 1.1270 (the starting point of the uptrend coming from early January) could be witnessed.