EUR/USD Price Analysis: Retreats from 1.1100 within nearby bearish channel as ECB fears mount

• EUR/USD pares post-Fed gains within eight-day-old descending trend channel.
• Fears of ECB’s dovish hike prod Euro bulls, positioning for US Q2 GDP also weigh on prices.
• Upbeat oscillators, sustained trading beyond key horizontal support, rising trend line favor Euro buyers.
• 50-SMA will act as the last defense of EUR/USD bears before challenging yearly top.

EUR/USD reverses corrective bounce off a two-week low with an eight-day-old bearish trend channel, declining 0.07% intraday to 1.1080 amid the early hours of Thursday’s Asian session.

In doing so, the Euro pair consolidates the previous day’s gains amid hopes of witnessing a dovish outcome from the European Central Bank (ECB), other than the widely expected 0.25% rate hike from the ECB. It should be noted that the cautious mood ahead of the first readings of the US Gross Domestic Product (GDP) for the second quarter (Q2) Annualized, expected to ease to 1.8% from 2.0%, as well as the Durable Goods Orders for June, likely easing to 1.0% from 1.8% prior (revised), also weigh on the EUR/USD price.

Technically, the EUR/USD pair is likely to defy the latest bearish channel formation by taking clues from the bullish MACD signals and upbeat RSI (14).

Adding strength to the bullish bias for the Euro pair could be the successful trading above the five-week-old horizontal support zone, around 1.1000, as well as an upward-sloping support line stretched from late May, close to 1.0945 by the press time.

In a case where the EUR/USD remains weaker past 1.0945, the odds of witnessing a slump toward the monthly low of 1.0833 can’t be ruled out.

On the flip side, a clear break of 1.1110 will defy the bearish channel but the 50-SMA hurdle of around 1.1150 prods the Euro bulls before directing them to the yearly top marked on July 18 around 1.1275.

EUR/USD: Four-hour chart

Trend: Further upside expected