Title: EUR/USD Price Analysis: Struggles to make it through descending channel hurdle, FOMC awaited
Jul 26, 2022 2:04:33 AM E.T
The EUR/USD pair continued its sideways consolidation move on Tuesday, remaining confined to a familiar trading range as the European session began.
The pair last hovered in the region of 1.0220-1.0225, almost unchanged on the day.
The US dollar held near its lowest level since July 5, which in turn was seen as a key factor that provided some support to the EUR/USD pair.
However, recession fears continued to weigh on the common currency and acted as a headwind for spot prices.
From a technical perspective, the EUR/USD pair was seen flirting with the upper boundary of the short-term descending channel.
It was followed by a swing high after the ECB, around the 1.0275-1.0280 region, which should now act as a key pivot point for short-term traders.
A sustained strengthening beyond the mentioned barriers would set the stage for an extension of the recent recovery move from the 0.9950 region, or the lowest level since December 2002, reached earlier this month.
The EUR/USD pair could then break through the 1.0300 round figure.
Momentum has the potential to lift spot prices towards the breakout point of the 1.0350 horizontal support, which has now become resistance.
Ultimately, the EUR/USD pair could regain the 1.0400 round figure, although it may struggle to achieve any follow-through.
On the other hand, the overnight low, around the 1.0180-1.0175 region, now appears to be protecting the immediate downside ahead of the 1.0130-1.0125 area and the 1.0100 boundary.
A convincing break below the latter would suggest that the recent corrective bounce has run out of steam.
A subsequent decline would make the EUR/USD pair vulnerable and put parity at risk.
The downward trajectory could extend further and force spot prices to challenge the low from the beginning of the year, around the 0.9950 region.