EUR/USD Price Analysis: Bulls pause as pair retreats toward 20-day SMA

• EUR/USD drops on Thursday, slipping to 1.0355 after recent gains.
• After rising above the 20-day SMA earlier in the week, the pair faces renewed selling pressure and sellers might test its strength.
• A loss would push the pair towards 1.0300.

The EUR/USD pair pulled back on Thursday, declining by 0.45% to 1.0370 as bullish momentum faded. After climbing above the 20-day Simple Moving Average (SMA) at the start of the week, the pair now faces renewed bearish pressure, with sellers attempting to push it back toward this key support level. However, the overall outlook remains bearish with the pair well below the 100 and 200-day SMA which stand around 1.0600 and 1.0700.

Technical indicators suggest a weakening in bullish traction. The Relative Strength Index (RSI) has sharply declined to 49, moving into negative territory, signaling that upside momentum is losing steam. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram remains flat with green bars, indicating indecisiveness in market sentiment.

If selling pressure persists, EUR/USD could test the 20-day SMA, currently near 1.0360. A break below this level would open the door for further declines toward 1.0300. On the other hand, if buyers regain control, resistance lies at 1.0400, followed by the key 1.0450 zone. For now, the short-term outlook hinges on whether the pair can hold above its 20-day SMA.

EUR/USD daily chart