EUR/USD Price Analysis: Volatility to escalate as USD Index strengthens ahead of US NFP

• EUR/USD is gauging a cushion around 1.0900 despite the negative market mood.
• A bear cross, represented by the 20-and 50-EMAs around 1.0927, adds to the downside filters.
• The RSI (14) has shifted into the bearish range of 20.00-40.00, which indicates more weakness ahead.

The EUR/USD pair is attempting to build a cushion below 1.0900 in the Asian session. The major currency pair has shown wild moves in the past two trading sessions led by Federal Reserve’s (Fed) interest rate decision-inspired volatility. And is likely to continue further ahead of the United States Nonfarm Payrolls (NFP) data.

Meanwhile, the risk profile is showing pessimism as risk-perceived assets like S&P500 futures are facing sheer pressure. The US Dollar Index (DXY) is struggling to surpass the immediate resistance of 101.55. The 10-year US Treasury yields are continuously declining and have refreshed the day’s low below 3.37%.

EUR/USD witnessed a vertical sell-off after an Inventory Distribution chart formation on an hourly scale. The inventory distribution in a minor range of 1.1006-1.1033 indicates a shift of inventory from institutional investors to retail participants.

The shared currency pair has dropped to near the critical support around February 2 low at 1.0885.

The 20-and 50-period Exponential Moving Averages (EMAs) have delivered a bear cross around 1.0927, which indicates more weakness ahead.

Also, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00 and is indicating more weakness.

The asset might display further weakness after a decisive break below February 2 low at 1.0885, which will drag the asset toward February 1 low at 1.0852 followed by January 31 low around 1.0800.

On the flip side, a break above the intraday high at 1.0916 will strengthen the Euro bulls and will drive the asset toward the horizontal resistance placed from January 23 high at 1.0927 and the psychological resistance at 1.1000.

EUR/USD hourly chart