- The EUR/USD rate rebounded on Friday, ending its weekly losing streak.
- The last-second revival in fiber optic offerings was driven by dollar weakness in the broad market.
- The euro remains poised for further losses after the ECB cuts interest rates again this week.
The EUR/USD rate rebounded on Friday, ending a four-day losing streak. The broader sell-off in the US dollar, driven by a market-wide recovery in risk appetite, was the main driver of Fiber’s earnings boost at the end of the trading week, rather than any domestic gains in euro markets.
The European Central Bank’s (ECB) mid-week interest rate cut has given markets no reason to support the euro in the near future, and fiber bulls will be forced to sit on their hands and wait until next Thursday’s EU-wide Purchasing Managers’ Index (PMI) before they can make significant apply of buy buttons.
Data on the U.S. housing and construction markets were moderately mixed on Friday, further strengthening investors’ buying mood and further allaying any fears of an upcoming economic slowdown. The US tender landing scenario appears to have been completely reversed, with growth and activity rates easily exceeding expectations, with upbeat retail sales data released earlier this week further confirming this.
EUR/USD price forecast
EUR/USD has seen a moderate rebound after testing lows near the 1.0850 level, and the pair is currently trading around 1.0867. However, the broader bearish structure remains intact as long as the pair remains below the 200-day exponential moving average (EMA), which is located at 1.0899, and the 50-day EMA at 1.0997. The recent bounce could mean further gains, but the bears will likely vigorously defend the 1.0900 area. A rejection at this level would confirm the downtrend, potentially pushing the pair back toward psychological support at 1.0800.
The Moving Average Divergence (MACD) indicator continues to indicate downward pressure, with both the MACD and signal lines in negative areas. Despite the recent price rally, the histogram remains bearish, suggesting that the current recovery may be narrow. A break above the 200-day EMA at 1.0899 would be necessary to signal a significant change in momentum and move towards the resistance levels at 1.0950 and 1.1000. Failure to break this barrier, however, may result in renewed selling pressure, and the next significant support will be observable around 1.0800.
