The EUR/USD currency pair staged a modest rebound on Friday, rising by 0.2% to 1.0495 after reaching fresh lows earlier in the week. Despite the recovery, the pair struggled to breach the key 20-day Simple Moving Average (SMA) near 1.0550, keeping the short-term outlook tilted to the downside.

Technical Indicators Show Mixed Signals

Technical indicators suggest that while there are signs of stabilization, the broader bearish trend remains intact. The Relative Strength Index (RSI), a widely used momentum indicator, rose sharply to 44. While this reflects improving momentum, it remains in negative territory, signaling that the recovery lacks robust follow-through. The RSI’s position below 50 suggests that downward pressure could still prevail if the pair fails to gain further ground.

Additionally, the Moving Average Convergence Divergence (MACD) histogram continues to print decreasing green bars, highlighting persistent bearish sentiment despite Friday’s modest gains. The MACD’s failure to show a convincing bullish crossover further reinforces the bearish bias for EUR/USD in the near term.

Key Levels to Watch for EUR/USD

For the bullish case to regain momentum, EUR/USD needs to decisively reclaim the 20-day SMA, which currently sits near 1.0550. A clear break above this level could shift the outlook to neutral or positive, signaling that buyers are stepping in. However, unless this key resistance is breached, the market sentiment will likely remain bearish.

Immediate support for the EUR/USD is found at the psychological level of 1.0500, followed by the 1.0480 mark. A failure to hold above these levels would likely accelerate downside pressure, with potential for further declines. A decisive break below 1.0480 could set the stage for a retest of even lower levels in the near future.

Also Read: EUR/USD Edges Higher: 20-Day SMA Holds Key as Bulls Eye 1.0600 Resistance

Outlook for EUR/USD

As it stands, the EUR/USD pair is caught in a tug-of-war between bearish technical indicators and short-term attempts at recovery. The coming days will be crucial in determining whether the bulls can overcome key resistance levels or if the pair will continue its downward trajectory. Investors and traders should closely monitor the 20-day SMA and the key support levels to gauge the next potential move in this major currency pair.