In Friday's late European session, EUR/USD is finding solid footing above the key 1.0800 level, buoyed by robust economic data from the Eurozone. The upbeat mood around the euro is primarily due to the strong preliminary PMI figures for May, which have brightened the Eurozone’s economic prospects. Despite this positive data, the ECB is expected to maintain its current interest rate stance for the foreseeable future. 

The EUR/USD chart on the 4-hour timeframe shows the pair consolidating near the upper boundary of a descending channel, with pressure building up around the 1.0900 level. The price action suggests that EUR/USD is testing resistance, but a breakout above this level could signal a potential reversal of the downtrend. The RSI indicator is oscillating near the 60 mark, indicating modest bullish momentum but not yet in overbought territory. The pair is supported by the 50 and 200-period moving averages, which are providing dynamic support around 1.0800 and 1.0723, respectively. If the pair fails to break the upper bound, a pullback towards the horizontal level support near 1.0720 could be expected:

According to S&P Global, the Composite PMI climbed to 52.3, surpassing both the consensus forecast of 52.0 and the previous month's reading of 51.7. This marks the third consecutive month of improvement, indicating resilient economic activity even as the ECB sticks to its restrictive monetary policy.

The HCOB Chief Economist highlighted a silver lining for the ECB: inflation rates for input and output prices in the services sector have eased compared to the prior month. This development could support the ECB's apparent inclination to cut rates at their June 6 meeting. However, the economist cautioned that the improved inflation outlook might not be sufficient for the ECB to signal further rate cuts down the line.

Adding to the mixed signals, ECB board member Isabel Schnabel suggested on Friday that the central bank should tread carefully with rate reductions. While acknowledging a noticeable decline in price pressures, she pointed out that domestic and service inflation remain stubbornly high, urging caution in hastily lowering rates.

Across the Atlantic, US preliminary PMI figures show business activity growing at its fastest pace in over two years, following two months of slower expansion. This robust data points to a strong GDP performance for the second quarter, dampening market speculation that the Federal Reserve will cut interest rates in September.

Moreover, the US Census Bureau reported a $1.9 billion (0.7%) increase in Durable Goods Orders for April, totaling $284.1 billion. This follows a revised 0.8% rise in March, beating expectations of a 0.8% decline and signaling ongoing demand strength.

On the monetary policy front, Atlanta Fed President Raphael Bostic indicated on Thursday that the Fed might need to delay considering rate cuts due to persistent inflationary risks, despite some easing in April’s CPI.

The US Dollar Index (DXY) is exhibiting signs of vulnerability as it hovers near the lower boundary of its ascending channel, currently around the 104.18 level. This support line appears fragile, indicating a potential for a downside breach if bearish pressure persists. The RSI indicator is trending near the 40 mark, reflecting weakened momentum and increasing the likelihood of further declines. The price is struggling to stay above the 50-period moving average, signaling a lack of bullish conviction: