EUR/USD Price Analysis: Pair looks to approach 1.0750 ahead of ECB policy decision

• EUR/USD holds ground around 1.0740 ahead of the ECB monetary policy decision.
• Momentum indicators suggest bearish bias to continue in the short term.
• Key support appears around the weekly low followed by the 1.0700 psychological level.
• 14-day EMA could act as a barrier following the 1.0800 psychological level.

EUR/USD hovers around 1.0740 during the Asian session on Thursday, attempting to recover from the previous day’s losses ahead of the policy decision from the European Central Bank (ECB).

The EUR/USD pair experienced a decline on Thursday following the release of optimistic Consumer Price Index (CPI) data from the United States (US). The US CPI Year-over-Year increased to 3.7%, up from the previous rate of 3.2%, exceeding market expectations of 3.6% for August.

The monthly core CPI showed an improvement, rising to 0.3% from the previous 0.2% for the same month. This increase was unexpected, as it was anticipated to remain unchanged. However, the annual core rate matched expectations by recording a reading of 4.3%, in line with the previous figure of 4.7%.

The pair may encounter initial support around the weekly low at 1.0705 lined up with the 1.0700 psychological level, followed by the previous week’s low at 1.0685.

A firm break below the latter could open the doors for the EUR/USD sellers to navigate the region around June’s low at 1.0661 aligned with the 1.0650 psychological level.

On the upside, a significant resistance level for the EUR/USD pair appears at the 14-day Exponential Moving Average (EMA) at 1.0769, followed by the 21-day EMA at 1.0798 lined up with the 1.0800 psychological level.

A break above that level could provide support for Euro buyers, allowing them to potentially target the area around the 23.6% Fibonacci retracement level at 1.0823.

The Moving Average Convergence Divergence (MACD) line remains below the centerline and the signal line. This configuration suggests a potential bearish momentum in the market, which can be seen as a signal that the recent downtrend may continue to strengthen.

Traders of the EUR/USD pair will likely observe the 14-day Relative Strength Index (RSI), which suggests a bearish sentiment in the short term as it lies below the 50 level.