EUR/USD Price Analysis: Surges eyeing a test of the 50-DMA

• The EUR/USD rises close to 1% after a lower-than-expected US inflation report.
• The shared currency failed to crack the 50-DMA early in the New York session.
• From a long-term perspective, the pair is neutral-to-downward, but the one-hour chart keeps buyers hopeful once they clear 1.0344.

The EUR/USD rallies towards the 50-day EMA, reaching a five-week high of around 1.0366, amidst an upbeat sentiment, courtesy of lower than estimated US inflation. That, alongside investors’ scaling back odd of a 75 bps rate hike by the Fed, spurred a risk on reaction, with US equities soaring. At the time of writing, the EUR/USD is trading at 1.0303. up by almost 1%.

EUR/USD Price Analysis: Technical outlook

From a daily chart perspective, the EUR/USD is still neutral to downward biased. However, buyers are gathering momentum, as shown by the Relative Strength Index, decisively breaking above the 50-midline for the first time since June 8, signaling buyers are stepping in. Nevertheless, sellers would get the upper hand until buyers reclaim the 50-day EMA at 1.0344.

In the one-hour time-frame, the EUR/USD rally appears to be losing steam, at the daily high at 1.0368, with the major retreating towards current price levels, at the R3 daily pivot. The fall might be attributed to the Relative Strength Index (RSI), which advanced sharply towards overbought territory at 87 before exiting and sits at 64 as buyers take a breather. Therefore, the pair is upward biased in the near term.

Upwards, the EUR/USD’s first resistance would be the August 10 high at 1.0368. Once cleared, the next supply zone would be the 1.0400 figure, followed by the July 4 daily high at 1.0445.

EUR/USD Hourly chart

EUR/USD Key Technical Levels