The EUR/USD exchange rate has stayed close to the 1.0500 mark for five days in a row. Despite the European Central Bank’s (ECB) decision to cut rates on Thursday, which initially pushed the pair towards its weekly low of 1.0452, buyers entered the market and managed to lift the exchange rate to its current level of 1.0498.
Technical Outlook for EUR/USD:
Looking at the daily chart of the EUR/USD, it’s evident that the pair is hovering around 1.0500 and has been unable to make a decisive move lower to retest the year-to-date low figures at 1.0331. Although the pair has been forming a series of lower highs, it may face challenges in extending its downward trend.
The momentum, as gauged by the Relative Strength Index (RSI), indicates that buyers are gathering strength. Should they manage to achieve a daily close above 1.0500, it could provide them with an advantage. In such a scenario, the key resistance levels for the EUR/USD would be the December 12 high of 1.0530. Beyond that, further resistance lies at 1.0600 and then at last week’s peak of 1.0629.
Conversely, if the EUR/USD continues to stay below 1.0500, there’s a possibility that it could extend its losses and break past 1.0452. If this were to happen, it would expose the November 26 low of 1.0424, and subsequently, the November 22 swing low of 1.0331. As the market awaits further cues and developments, the EUR/USD pair remains in a rather delicate balance, with its next move hinging on whether it can break above or below the crucial 1.0500 level.
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