EUR/USD weakens below key averages as US Dollar strength caps rebounds
The Euro (EUR) turns lower against the US Dollar (USD) on Friday, surrendering intraday gains as renewed demand for the Greenback keeps the pair on the defensive. At the time of writing, EUR/USD is trading flat near 1.1600, after briefly sliding to its lowest level since November 28.
The US Dollar draws support from stronger-than-expected US economic data, which has reinforced the view that the Federal Reserve (Fed) can afford to hold off on cutting interest rates in the near term.
Further supporting the US Dollar, comments from White House National Economic Council Director Kevin Hassett helped ease investor concerns over recent political noise surrounding the Fed. Speaking to Fox Business Network, Hassett said he expects “there’s nothing to see here,” adding that he believes the cost overruns cited by Fed Chair Jerome Powell are related to factors such as asbestos.
From a technical perspective, EUR/USD remains under sustained selling pressure, dipping below its key moving averages on the daily chart. The pair is trading beneath the 21-day SMA near 1.1707 and the 50-day and 100-day SMAs clustered around 1.1660-1.1665, reinforcing a bearish structure and highlighting strong overhead dynamic resistance.
Momentum indicators also favor sellers. The Moving Average Convergence Divergence (MACD) remains below the signal line and in negative territory, with a flat negative histogram pointing to persistent bearish momentum. The Relative Strength Index (RSI) hovers near 34, reflecting weak buying interest and keeping the pair close to oversold conditions.
On the downside, the 1.1585-1.1600 zone is acting as immediate support. A clear break below this area could open the door toward 1.1550, followed by the 1.1500 psychological level.
On the upside, any corrective rebound is likely to face stiff resistance near 1.1660-1.1700, where the 50-day, 100-day and 21-day SMAs converge. Only a daily close back above this confluence zone would ease near-term bearish pressure and allow for a deeper recovery.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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