EUR/USD rebounded on Friday from multi-month lows but is still headed towards a weekly loss. The Euro is on the verge of posting its ninth consecutive week of losses against the US Dollar, marking the longest negative streak since the currency was created.
Technical Overview
From a technical perspective, the recent breakdown through the very important 200-day Simple Moving Average (SMA), for the first time in 2023, was seen as a fresh trigger for bearish traders. Moreover, oscillators on the daily chart are holding deep in the negative territory and are still far from being in the oversold zone, validating the negative outlook for the EUR/USD pair. Some follow-through selling below the 1.0635-1.0630 area, or the multi-month low touched on Thursday, will validate the bearish outlook and drag spot prices to the 1.0600 round figure. A convincing break below the latter should pave the way for an extension of the downfall towards the next relevant support near the 1.0525 area (March 8 low) en route to the 1.0500 psychological mark and the YTD low, around the 1.0480 region touched in January.
On the flip side, any further recovery is likely to confront resistance near the previous monthly low, around the 1.0685 region. This is closely followed by the 1.0700 mark, above which a bout of a short-covering could lift the EUR/USD pair towards the top end of the weekly range, around the 1.0765-1.0770 area. The next relevant hurdle is pegged near the 1.0800 mark and the very important 200-day Simple Moving Average (SMA) support breakpoint, currently near the 1.0820-1.0825 area. A sustained strength beyond the said barrier should allow spot prices to reclaim the 1.0900 mark, which coincides with the 100-day SMA and cap any further gains. Some follow-through buying, however, will suggest that the pair have formed a bottom and shift the near-term bias in favour of bullish traders.