EUR/USD Forecast: Euro could weaken further once below 1.0930

EUR/USD's indecisive action continued in the second half of the week as markets' search for a catalyst continued. The pair's near-term technical outlook points to a bearish tilt and an extended slide could be witnessed if 1.0930 support fails.

For the second straight day on Thursday, EUR/USD has lost its traction after having approached 1.1000, reflecting the lack of buyers' commitment to further Euro strength. Moreover, the risk-averse market environment helped the US Dollar hold its ground and made it even harder for the pair to continue to stretch higher.

Early Friday, S&P Global Composite PMI in Germany improved to 53.9 in April from 52.6 in March with Services PMI jumping to 55.7 from 53.7.

In the Eurozone, S&P Global Manufacturing PMI declined to 45.5 from 47.3 but the Services PMI advanced to 56.6 from 55. "Growth became increasingly uneven in April," the publication read. "The resulting outperformance of services relative to manufacturing was the widest since early-2009 and the survey has not yet previously recorded such a strong service sector expansion at a time of manufacturing decline." 

In the second half of the day, S&P Global Composite PMI in the US is forecast to edge higher to 52.8 from 52.3. A disappointing reading could revive fears over the US economy tipping into recession later in the year and weigh on the USD and vice versa. Investors will also pay close attention to comments regarding the employment situation and price developments. 

US S&P Global PMIs Preview: Win-win situation for the Dollar? Why investors may get spooked.

EUR/USD Technical Analysis

EUR/USD failed to return within the ascending regression channel and the Relative Strength Index (RSI) indicator on the four-hour chart dropped below 50, pointing to a bearish tilt in the short-term outlook. 

On the downside, the 100-period Simple Moving Average aligns as key support at 1.0930. EUR/USD is yet to make a four-hour close below that level since the beginning of the latest uptrend in mid-March. 1.0900 (psychological level, static level), 1.0870 (Fibonacci 38.2% retracement of the latest downtrend) and 1.0825 (200-period SMA) could be seen as next bearish targets if 1.0930 fails.

The lower limit of the ascending channel continues to act as key resistance at 1.0970 before 1.1000 (psychological level, static level) and 1.1030 (mid-point of the ascending channel).