• EUR/USD has tested waters below 1.1000 as the USD Index is eyeing more upside.
• The Eurozone economy is swiftly approaching recession as retail demand is consistently declining.
• EUR/USD is showing signs of a significant loss in the upside momentum after refreshing its annual high at 1.1096.

The EUR/USD pair has checked territory below the psychological support of 1.1000 in the Tokyo session. The major currency pair is expected to display more weakness as the US Dollar Index (DXY) is eyeing more upside above the immediate resistance of 101.50 ahead of the US inflation data.

As per the preliminary report, the US inflation is expected to remain steady. It seems that lower credit from commercial banks due to weak demand and tight credit conditions has been offset by higher households' earnings.

Meanwhile, the Eurozone economy is swiftly approaching recession as retail demand is consistently declining and the growth rate has been squeezed sharply led by higher interest rates from the European Central Bank (ECB).

EUR/USD is showing signs of a significant loss in the upside momentum after refreshing its annual high at 1.1096. The shared currency pair is struggling to maintain an auction above the horizontal resistance plotted from February 02 high at 1.1033. The 20-period Exponential Moving Average (EMA) at 1.0983 is providing a cushion to the Euro.

An oscillation in the 40.00-60.00 range by the Relative Strength Index (RSI) (14) in indicating a lackluster performance ahead.

Should the asset break below May 02 low at 1.0942, a downside move by the US Dollar will drag the asset towards April 12 low at 1.0915 and April 10 low at 1.0837.

Alternatively, a recovery move above April 26 high at 1.1095 will drive the asset toward a fresh 13-month high at 1.1185 followed by the round-level resistance at 1.1200.

EUR/USD daily chart