EUR/USD Price Analysis: Pullback meets sellers near 20-DEMA

The EUR/USD pair retreats after a short-lived pullback move to near the 1.0550 in the European session. The major currency pair faced an intense sell-off as the appeal for the US Dollar improved amid deepening Middle East tensions and some increment in expectations of one more interest rate increase from the Federal Reserve (Fed) by the year-end.

The US Dollar Index (DXY) recovered strongly to near 106.60 and is expected to extend further as the United States is resilient unlike other economies, which are struggling to absorb the consequences of higher interest rates by the central bankers.

Meanwhile, the European Central Bank (ECB) is expected to keep interest rates unchanged in November as the Eurozone economy is facing the issues of poor economic prospects. To safeguard the shared continent from a slowdown, the ECB is expected to maintain interest rates steady at 4.5%.

EUR/USD drops vertically after a less-confident pullback to near the 20-day Exponential Moving Average (EMA) to near 1.0600. The shared currency pair trades near the horizontal support of the Broadening Triangle chart pattern, which is plotted from November 14 high at 1.0482. The upward-sloping trendline of the aforementioned chart pattern is placed from February 2 high at 1.1033.

The Relative Strength Index (RSI) (14) struggles to climb into the 40.00-60.00. A failure in the same would indicate that the downside momentum has been firmer.

A fresh downside would be seen if the asset drops below October 3 low at 1.0448. This would expose the asset to a fresh 10-month low around 1.0400. A slippage below the latter would make way for 11 November 2022 high at 1.3642.

On the flip side, a recovery move above October 12 high at 1.0640 would drive the asset toward September 6 low around 1.0700, followed by September 20 high at 1.0737.

EUR/USD daily chart