EURUSD TECHNICAL ANALYSIS. A short-term rally is imminent.

The price of EURUSD continued to decline as the FEDs decided to slow down on buying US T-bonds and taper with interest rates by next year. Also, the dovish commentary from European Central Bank (ECB) officials makes it difficult for the common currency to outperform the greenback.

ECB policy maker Klass Knot said on Thursday that they are weighing options to ease the transition out of the Pandemic Emergency Purchase Programme (PEPP). Additionally, ECB President Christine Lagarde downplayed inflation concerns by reiterating that they continue to view the upswing in prices as being largely driven by temporary factors.

Technically, EURUSD has gone below 1.16000 weekly support level, but the price keeps hovering below the weekly support level. The price of EURUSD touched 1.15250 last week, its lowest price in over a year.

The price of EURUSD will likely bounce this week because the weekly support was not removed completely. Price has been going sideways below the support and sellers' momentum is slowing down.

A short-term rally is imminent on this pair as buyers start to gather momentum around the weekly support. 1.17000 is the next psychological resistance level once the 1.16000 support level gets breached to the upside. The price of EURUSD is trading at 1.15824 at publishing time.

If the momentum of sellers increases, EURUSD might break below 1.15000 for the first time this year.