EUR/USD snaps four-day losing streak, but its a long way up

• EUR/USD rebounded on Friday, clipping a week-long losing streak.
• A last-second recovery in Fiber bids came from broad-market Greenback weakness.
• The Euro remains poised for further losses after another rate cut from the ECB this week.

EUR/USD drifted into a rebound on Friday, snapping a four-day losing streak. A wider selloff in Greenback flows off the back of a broad-market recovery in risk appetite was the primary driver in Fiber gains to wrap up the trading week, rather than any intrinsic boosts in Euro markets.

A midweek rate cut from the European Central Bank (ECB) gave markets little reason to prop up the Euro in the near-term, and Fiber bulls will be forced to sit on their hands and wait until next Thursday's pan-EU Purchasing Managers Index (PMI) figures before getting a chance to exercise their buy buttons meaningfully.

US housing and construction figures came in moderately mixed on Friday, further entrenching investors in a buying mood and further crushing any fears of an economic slowdown right around the corner. The US' "soft landing" scenario appears to have been fully averted with growth and activity metrics easily beating expectations, and upbeat Retail Sales figures releases earlier this week further make the case.

EUR/USD price forecast

EUR/USD has staged a modest rebound after testing lows near the 1.0850 level, with the pair currently trading around 1.0867. However, the broader bearish structure remains intact as long as the pair stays below the 200-day Exponential Moving Average (EMA), which is situated at 1.0899, and the 50-day EMA at 1.0997. The recent bounce could see further upside, but the bears are likely to defend the 1.0900 area vigorously. A rejection at this level would reaffirm the downtrend, potentially pushing the pair back towards the 1.0800 psychological support.

The Moving Average Convergence Divergence (MACD) indicator continues to point to downside pressure, with both the MACD and signal lines in negative territory. Despite the recent uptick in price, the histogram remains bearish, suggesting the current recovery might be limited. A break above the 200-day EMA at 1.0899 would be necessary to signal a meaningful shift in momentum, targeting the 1.0950 and 1.1000 resistance levels. However, failure to break through this barrier could result in renewed selling pressure, with the next significant support seen around 1.0800.

EUR/USD daily chart