EUR/USD forecast: Bulls might continue to struggle near mid-1.1200s, 100-day EMA

• The USD ticked higher on Tuesday and exerted some intraday pressure on the major.
• A fresh leg of a free-fall in the US bond yields kept a lid on any strong USD up-move.
• Investors now eye German data/Fedspeak for some short-term trading opportunities.

The EUR/USD pair had good two-way price moves on Tuesday and finally settled nearly unchanged for the day, forming a Doji candlestick pattern on the daily chart. The pair initially built on its recent bounce from over 26-month lows and touched a 2-1/2 week high level of 1.1250 during the Asian session, albeit failed to capitalize on the momentum and faced rejection near the 100-day EMA. Fears of a full-blown US-China trade and currency war recedes mildly after the PBOC took steps to contain the ongoing slide in the Yuan. This was evident from signs of stability across global financial markets and a goodish intraday bounce in the US Treasury bond yields, which eventually underpinned the US Dollar demand and prompted some fresh selling at higher levels.
 
The greenback got an additional boost after St. Louis Fed President James Bullard, one of the most dovish policymaker, said that the Fed shouldn’t respond to every move in the trade war and wait before the next move. The pair dropped to an intraday low level of 1.1168 but managed to reverse the dip and regained some positive traction during the Asian session on Wednesday amid a fresh leg of a free-fall in the US bond yields. In fact, the yield on the benchmark 10-year US government bond fell to its lowest level since Oct. 2016 and was seen affecting negatively on the buck. The pair held steady above the 1.1200 handle as market participants now look forward to the German Industrial Production for some impetus. Later during the early North-American session, a scheduled speech by Chicago Fed President Charles Evans might influence the USD price dynamics and further collaborate towards producing some short-term trading opportunities.
 
From a technical perspective, the 100-day EMA remains a key pivotal point for short-term traders, which if cleared decisively might now set the stage for a move back towards reclaiming the 1.1300 round figure mark with some intermediate resistance near the 1.1275-80 region. The momentum could further get extended towards the 1.1330-40 resistance zone en-route the next major hurdle near the 1.1365-70 region ahead of the 1.1400 round figure mark. On the flip side, any pullback below the 1.1200 handle now seems to find some support near the 1.1185 level, which is followed by support near the 1.1155-50 region. Failure to defend the mentioned support levels will negate prospects of any further recovery and turn the pair vulnerable to accelerate the slide back towards challenging the 1.1100 handle. A follow-through selling will suggest the resumption of the prior well-established bearish trend and pave the way for a further downfall towards testing the key 1.1000 psychological mark in the near-term.