EUR/USD Holds Above 50-Day SMA Amid Bullish Technical Picture

The EUR/USD pair is trading on the back foot Thursday, snapping a two-day winning streak as the US Dollar steadies. However, despite this setback, the near-term technical picture remains bullish following the late-July rebound from below 1.1400.

According to analysts at Scotiabank, fundamentals remain supportive and the EUR's recent recovery has closely mirrored the turn in yield spreads. They note that spot now trades close to their fair-value estimates, but caution that further gains will likely require some shift in central bank policy or an improvement in sentiment.

The technical analysis shows that EUR/USD maintains a mildly bullish near-term tone as it holds above the 50-day Simple Moving Average (SMA) at 1.1474. The Relative Strength Index (RSI) is around 61 and the Moving Average Convergence Divergence (MACD) line is in positive territory, indicating that buyers still have the upper hand.

However, topside progress is already challenged by the 100-day SMA at 1.1569 and the 200-day SMA at 1.1629, which cap the advance for now. On the downside, immediate support is seen at the 50-day SMA at 1.1474, ahead of a more significant horizontal floor near 1.1350.