EURUSD bears move in at key resistance, 1.0270 is key

• EURUSD bears are eyeing a break of key daily trendline support from the critical resistance area.
• US Dollar bulls are moving in on hawkish Fed prospects. 

EURUSD is battling back, down some 0.5% still, however, having fallen from a high of 1.0406 to a low of 1.0305. US Treasury yields increased on Thursday as investors bet on a relatively hawkish Federal Reserve.

The greenback was pressured in recent days due to last week's and this week's inflation data missing the mark vs. expectations. This had fanned the flames of the expectations of a Fed pivot while some of the Federal Reserve commentaries that accompanied the data implied that it could soon slow the pace of its interest rate hikes. However, a switch in sentiment on Thursday gave rise to a bid in the greenback once again. 

A number of other Fed officials, including Raphael Bostic, Michelle Bowman, James Bullard, Philip Jefferson, Loretta Mester, and Neel Kashkari, were all lining up to speak toward the end of the week. To start the day, Fed's Bullard said that policy is not getting in a range to be sufficiently restrictive and that hikes to date had only made a limited effect on observed inflation. He also said that signs of disinflation are tentative at best, but he is hopeful for 2023. He sees a minimum level for restrictive policy between 5% – 5.25%.

US Dollar bulls move in

Consequently, it was a bearish start to the day with US benchmarks in the red, US yields higher along with a firmer US Dollar. The dollar index 
DXY, which measures the currency against six major peers, was recently up 0.50% at 106.81 in midday trade. The index has traveled between a range of 106.098 and 107.240 on the day. However, the index remains in bearish territories while below 107.00. After hitting a 20-year high in late September the index had lost more than 8% when it touched its most recent intraday low on Tuesday.

EURUSD & DXY technical analysis

The daily chart shows the price below a key trendline and within an M-formation. The correction is underway, however. While below 107.00, the outlook remains bearish but a break of there opens the risk of a deeper bullish correction towards 108.80.

This leaves the outlook for EURUSD correctively bearish below 1.0270: