Anna 
EUR/USD entered a consolidation phase early on Friday, following a nearly 0.9% decline on Thursday. This fall was triggered by higher-than-expected U.S. inflation data for September, reigniting concerns that the battle against inflation remains ongoing and heightening expectations of continued policy tightening by the Federal Reserve.
As a result of Thursday’s losses, the technical outlook for the euro has reverted to a predominantly bearish setting on the daily chart. The euro’s recent rally hit a roadblock in the vicinity of the 1.0640 area, which corresponds to double Fibonacci retracement levels (23.6% retracement of the 1.1275/1.0448 decline and 38.2% retracement of the 1.0945/1.0448 decline).
The recent descent retraced nearly 61.8% of the 1.0448/1.0640 rally, heightening the risk of further declines once the euro completes its consolidation phase.
A close below the 10-day Exponential Moving Average (EMA) at 1.0544 on Friday would confirm the bearish stance, potentially leading to a retest of 1.0448 (the 2023 low) and a move towards 1.0405 (50% retracement of the 0.9535/1.1275 rally). A break below the latter level would signify a continued descent for the exchange rate since the peak of 1.1275 in 2023.
Any additional gains are expected to be capped beneath the declining 200-day moving average at 1.0570, enabling new bearish pressures to come into play.
