EUR/USD edges lower towards 0.9800 as US dollar firms up ahead of PMIs

EUR/USD is dropping towards 0.9800 heading towards early European morning, as the US dollar is breaking its consolidative mode to the upside.

Investors gear up for a raft of preliminary PMis from across the Euro area economies and the US for fresh trading impetus, as the dust settles over the Fed aftermath. Fed Chair Jerome Powell’s speech later in the NA session will also hog the limelight, as it will be his first appearance after Wednesday’s rate hike decision.

Meanwhile, the US Treasury yields are holding onto their recent upsurge, underpinning dollar bulls while exerting downward pressure on the major. Further, the euro also remains vulnerable, in the wake of the renewed Russian aggression.

On Wednesday, Russian President Vladimir Putin announced a partial military mobilization in Ukraine, denting market sentiment and bolstering the safe-haven bids for the greenback.

The Russia-Ukraine crisis and the resultant Moscow’s gas flow cut-off to Europe has placed the old continent on brink of a recession. The upcoming Eurozone Manufacturing and Services PMIs could throw fresh light on the health of the Union.

EUR/USD: Technical outlook

Looking at EUR/USD’s daily chart, the ascending triangle breakdown confirmed, following the Fed decision on Wednesday, keeps the further downside exposed towards 0.9750 – the psychological level. But the bears need a sustained break below the 0.9800 level beforehand.

The 14-day Relative Strength Index (RSI) remains bearish while sitting just above the oversold territory, adding credence to the next leg lower.

EUR/USD: Daily chart

On the flip side, Thursday’s high at 0.9907 will be the first critical hurdle should the major attempt a recovery.

Further up, daily closing above the confluence of the bearish 21-Daily Moving Average (DMA) and the triangle support-turned-resistance around 0.9970 will test buyers.  

EUR/USD: Additional levels to consider