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From a technical standpoint, on Friday, prices demonstrated resilience below the 50% Fibonacci correction level, which marked the rally in October and November. Assuming Fibonacci is positioned at reversal points. And so far, they managed to defend the 100-day simple moving average (SMA).
Therefore, before preparing for the continuation of the recent pullback from the multi-month peak reached in November, it would be prudent to wait for a sustainable breakout of the 50% Fibonacci. Then, the EUR/USD pair may drop below the 1.0700 mark and test the 61.8% Fibonacci level.
On the other hand, the round figure of 1.0800 coincides with the 38.2% Fibonacci level. This breakout point acts as an immediate strong barrier before the 200-day SMA around 1.0825.
Some subsequent purchases may bring the EUR/USD pair back to the 1.0900 mark. The impulse may further develop towards the next obstacle near the horizontal zone of 1.0950, above which bulls may make a new attempt to conquer the psychological level of 1.1000.
From a fundamental analysis perspective, ahead of the key Fed interest rate data to be maintained tomorrow and further cuts in March, this may act as a tailwind for the pair. However, on the other hand, the euro is undermined by speculation that, against a more significant-than-expected decline in inflation in the Eurozone observed last month, the European Central Bank may begin cutting interest rates early next year. This, in turn, restrains traders from aggressive buying positions and leads to restraint within the current range.
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