Key support comes back near 1.1110 ahead of German/US data

• EUR/USD rebounds from key Fibo support at 1.1107 amid renewed US dollar selling.
• Risk aversion and pre-German inflation and US GDP jitters could limit the pair’s upside.
• The daily technical setup continues to remain constructive for EUR/USD in the short term.

EUR/USD it’s back in the green early Thursday, reversing some of Wednesday’s steep selloff. However, further upside appears elusive if risk aversion ignites and revives safe-haven demand for the US dollar (USD).

Markets are trading cautiously following disappointing sales forecasts from US artificial intelligence giant Nvidia and amid heightened jitters heading into the release of top economic data this week.

Germany is due to release preliminary inflation data, while the US calendar will feature its second estimate of Gross Domestic Product (GDP) later on Thursday.

From a short-term technical perspective, the EUR/USD trend remains intact as long as the 1.1107 support holds. This level is the 23.6% Fibonacci Retracement (Fibo) level of the August rally from 1.0775 to 1.1202, 13-year highs.

The 14-day Relative Strength Index (RSI) remains firmly above 50, currently near 63, justifying bullish potential for the major.

Acceptance above the psychological level of 1.1150 is needed on a daily close basis to retest the annual peak just above 1.1200. Before that, Wednesday’s high of 1.1186 could challenge bearish commitments.

On the other hand, a sustained break below the aforementioned 23.6% Fibo support at 1.1107 could open downside to the same advance’s 38.2% Fibo level, aligned at 1.1045.

EUR/USD buyers will then find immediate support at the 21-day simple moving average (SMA) of 1.1026. Further declines could thwart the 1.1000 round level.

EUR/USD: Daily chart