EUR/USD Price Forecast: Euro forms potential higher low above 100-day SMA

The EUR/USD currency pair has experienced a sharp two-way price movement on Friday following a stronger-than-anticipated U.S. employment report, which has increased volatility. Initially, the pair dropped to an intraday low of 1.1585 before recovering as the U.S. Dollar (USD) failed to maintain its gains. Currently, the EUR/USD is trading around 1.1620.

The U.S. Dollar Index (DXY) is at 99.10, having risen as high as 99.36 following the employment data. On the daily chart, EUR/USD is confined between the 100-day Simple Moving Average (SMA) and the 200-day SMA, indicating a narrow consolidation zone. The overall price structure still displays a mild bullish bias. Since recovering from below 1.1400 in late July, EUR/USD has made higher highs and higher lows, reaching 1.1711 on August 21.

This suggests a potential emergence of another higher low above the 100-day SMA, although buyers must clear the 200-day average to regain control. The Relative Strength Index (RSI) has moved from overbought levels around the August 21 high but remains above the neutral 50 mark at around 56, which indicates weakening bullish momentum.

The Moving Average Convergence Divergence (MACD) is slightly below zero, signaling a slight bearish bias. However, the diminishing red histogram bars suggest that downside momentum is weakening. Should EUR/USD break above the 200-day SMA near 1.1634, it could pave the way toward the 1.1700 mark, followed by the higher resistance zone around 1.1800.

Conversely, immediate support is found at the 100-day SMA at 1.1564, followed by the 50-day SMA at 1.1508. A more severe decline may expose the horizontal support region around 1.1400.