EUR/USD Price Analysis: Snaps the two-day losing streak, the key support level is seen at the 1.0870–80 zone

The EUR/USD pair finds some support near 1.0880 and then rebounds above the 1.0900 mark during the early European session on Friday. The recovery of the pair is bolstered by the softer US Dollar (USD) despite Eurozone inflation coming in worse than market expectations. The major currently trades around 1.0907, up 0.20% on the day.

The Harmonized Index of Consumer Prices (HICP), which measures inflation in the Eurozone, has raised expectations among investors that the European Central Bank (ECB) might start cutting its deposit rate as early as next April. Nonetheless, ECB President Christine Lagarde emphasized this week that now is not the time to declare victory since wage pressures remain high.

According to the four-hour chart, EUR/USD maintains a bullish outlook as the major pair holds above the key 100-hour Exponential Moving Averages (EMA) with an upward slope. However, the Relative Strength Index (RSI) stands below the 50.0 midline, indicating that further downside cannot be ruled out for the time being.

On the upside, the immediate resistance level for EUR/USD is seen near a low of November 28 at 1.0935. The next hurdle to watch is a high of November 21 at 1.0965. Any follow-through buying above the latter will see the rally to the key upside barrier at the 1.1015–1.1025 region, portraying the confluence of the Bollinger Band and a high of November 29.

On the flip side, the critical support level is located at the 1.0870–1.0880 zone. The mentioned level is the congestion of the 100-hour EMA and the lower limit of the Bollinger Band. The additional downside filter to watch is a low of November at 1.0852, followed by a low of November 17 at 1.0825, and finally a high of November 6 at 1.0755.

EUR/USD four-hour chart