- EUR/USD consolidates the biggest daily loss in a week after bouncing off short-term key supports.
- 50-SMA, five-week-old horizontal area appear to be strong supports.
- Bulls need validation from 200-SMA to retake control.
EUR/USD holds onto the corrective pullback from the 50-SMA around 1.0525 during Friday’s Asian session.
In doing so, the major currency pair also justifies Wednesday’s rebound from the key horizontal support zone comprising multiple levels marked since mid-May.
Given the sluggish MACD signals and steady RSI, coupled with the quote’s ability to recover from important supports, the EUR/USD pair is likely to run towards the 200-SMA hurdle surrounding 1.0585.
However, the quote’s upside past 1.0585 will need to cross the weekly peak of 1.0600 and early June’s low near 1.0630 to give control to buyers.
Meanwhile, the 50-SMA and aforementioned support area, respectively near 1.0495 and 1.0470-60, could challenge the EUR/USD bears.
During the pair’s weakness past 1.0460, multiple troughs near 1.0400 could test the bears before directing them to the yearly low of 1.0349.
To sum up, EUR/USD signals corrective pullback but the buyers need validation from 200-SMA.
EUR/USD: Four-hour chart
Trend: Further recovery expected
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