EUR/USD Price Analysis: Further downside cannot be ruled out

The EUR/USD pair trades on a stronger note during the early European session on Wednesday. The major pair has flirted with the weekly lows of 1.0821 and rebounded to 1.0862. However, the potential upside seems limited as investors turn cautious ahead of the European Central Bank's (ECB) interest rate decision on Thursday. 

Ahead of the ECB key event, the preliminary Eurozone Purchasing Managers Index (PMI) will be due. The Composite PMI is expected to improve from 47.6 to 48.0 in January. The Manufacturing PMI is estimated to rise to 44.8, and the Services PMI is projected to grow to 49.0. 

According to the four-hour chart, EUR/USD keeps the bearish vibe unchanged below the 50- and 100-period Exponential Moving Averages (EMA) with a downward slope. Furthermore, the Relative Strength Index (RSI) stands in bearish territory below the 50 midlines, suggesting that further decline looks favorable.

The 50-period EMA at 1.0895 acts as an immediate resistance level for the major pair. The crucial upside barrier will emerge at 1.0915, portraying the confluence of the upper boundary of the Bollinger Band and the 100-period EMA. The next hurdle is located near a high of January 15 at 1.0967, and finally at the 1.1000 psychological round figure. 

On the other hand, the initial support level is seen near the lower limit of the Bollinger Band at 1.0840. The additional downside filter to watch is a low of January 23 at 1.0820. Further south, the next downside stop is located near a low of December 13 at 1.0773.

EUR/USD four-hour chart