EUR/USD Price Analysis: Clings to critical daily support line, focus on NFP, Friday’s close

• EUR/USD is consolidating the downside before the next leg lower.
• The persistent strength in the US yields on Fed’s tapering risks weighs on the euro.
• EUR/USD is teasing the downside break of the key daily descending trendline.

EUR/USD is falling for the fourth straight day on Friday, as the strengthening US Treasury yields continue to keep the euro bulls at bay.

The US returns on the market climb to highest in four months amid an imminent Fed’s tapering, which could get confirmed by the NFP release due later in the day.

Meanwhile, resurfacing fears over China’s indebted property market outweighed the optimism fuelled by the successful Senate vote on the US debt ceiling extension. The resurgence of the risk-off flows lifted the US dollar’s safe-haven demand at the expense of the euro.

At the time of writing, EUR/USD is trading flat at 1.1546, awaiting the US payrolls data for the next directional move.

From a short-term technical perspective, the main currency pair is on the verge of breaching the critical daily support line, extending back to early July, at 1.1541.

A fresh downswing could initiate on a daily candlestick closing below the latter, putting the 14-month lows of 1.1529 at risk.

Further south, the 1.1500 number could get tested, opening floors towards the mid-2020 levels around 1.1450.

EUR/USD: Daily chart

However, with the Relative Strength Index (RSI) lying within the oversold territory, currently at 27.93, a temporary pullback in the spot could be in the offing.

A meaningful recovery is likely to initiate only on acceptance above the 1.1600 level. The October 4 highs of 1.1640 will be the next target for the bullish traders.

EUR/USD: Additional levels to consider