In the European session, EUR/USD Retreats towards 1.0800 in European Session trading on the back foot, approaching the key level of 1.0800. The US Dollar maintains its previous gains as investors navigate the market with cautious optimism while closely monitoring US debt ceiling developments and upcoming US data.

From a technical standpoint, the EUR/USD pair has managed to hold above the 100-day Simple Moving Average (SMA) near the significant level of 1.0800. However, a sustained break below this level could serve as a fresh bearish trigger, potentially extending the recent pullback from a one-year peak. This could lead spot prices to decline further, with potential support levels at 1.0755-1.0750 and eventually the round figure of 1.0700. Further downward momentum could even push prices towards the 1.0600 mark, with intermediate support anticipated around 1.0640-1.0635.

On the other hand, if a recovery attempt takes place and the EUR/USD pair moves back above the mid-1.0800s, it may encounter resistance around the 1.0875-1.0880 region, followed by the 1.0900 mark. Notably, breaching this level would coincide with the weekly high, potentially triggering short-covering and lifting the pair toward the horizontal support breakpoint at 1.0960. Sustained buying beyond this point would indicate that the recent downward trend has ended, shifting the bias in favor of bullish traders and potentially paving the way for a move beyond the significant level of 1.1000.

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