EUR/USD Price Forecast: Fading bullish momentum puts focus on 1.1500 support

The EUR/USD currency pair experienced a reversal in gains on Wednesday, edging lower as the US Dollar strengthened and overshadowed earlier gains. The pair now trades around 1.1521, having touched an intraday high of 1.1563. The US Dollar weakened immediately following the release of in-line US Consumer Price Index (CPI) data, with headline and core CPI easing to 3.4% and 2.5%, respectively.

This prompted traders to reduce Federal Reserve (Fed) rate-hike expectations. However, the Greenback soon pared its losses as high energy prices maintained upside inflation risks and increased safe-haven demand for the USD. The US Dollar Index (DXY) hovered near the psychologically significant 100 mark after bouncing back from an intraday low of 99.61.

The EUR/USD price pulled back towards the lower end of its recent range, breaking below the 100-day Simple Moving Average (SMA) at 1.1466 and the 50-day SMA at 1.1500. On the daily chart, the pair maintains a neutral-to-slightly bullish bias, still trading above both the psychological 1.1500 and the 50-day SMA. The Relative Strength Index (RSI) is near 56, while the Moving Average Convergence Divergence (MACD) remains positive, though the fading green histogram indicates weakening bullish momentum.

The Average Directional Index (ADX) is in the high 20s, suggesting moderate trend strength. An immediate break above the 100-day SMA at 1.1567 could provide resistance at the 200-day SMA near 1.1630. Conversely, the pair's immediate support lies at the horizontal 1.1500 level, followed by the 50-day SMA at 1.1466. Should the pair break below this level, the downtrend could intensify.