The EUR/USD pair advanced more than 0.32% on Friday as traders tested key resistance levels, with buyers targeting the 1.1600 psychological level. The pair traded near 1.1564 after recovering from daily lows of 1.1526.
EUR/USD technical outlook
The broader EUR/USD market structure continues to reflect a downtrend, with a pattern of lower highs and lower lows still intact. However, the pair’s recovery above the 1.1500 area on July 30 has increased the possibility of a potential bullish reversal.
Although EUR/USD recently reached the 1.1550 to 1.1560 range, the Relative Strength Index (RSI) indicates that bullish momentum is strengthening. A sustained move above key resistance levels could shift the outlook further in favour of buyers.
Key resistance and support levels
On the upside, the next important resistance level is the 200-day Simple Moving Average (SMA) at 1.1629. A break above this level could open the way toward the May 29 high at 1.1685.
If EUR/USD continues higher and clears these resistance zones, the pair could target the 1.1700 area, with further potential toward the April 17 high at 1.1849 and the 1.1900 level.
On the downside, a decline below the 1.1500 support zone could expose the pair to the 50-day SMA at 1.1465. Further weakness could bring the next demand area around 1.1400 into focus.
