- The US dollar fell modestly on Monday amid lower Treasury yields.
- The EUR/USD shows stabilization after bottoming out on Friday.
- A break above 1.0930 would strengthen the Euro, while a drop below 1.0880 could intensify negative pressure.
The EUR/USD rose marginally on a quiet Monday across financial markets. The last week of the month will witness key inflation data releases, and market participants will hear from many central bankers. The US dollar weakened moderately on Monday amid a slide in US yields and a rebound in commodity prices.
After PMI data on Friday triggered some pessimism about the economy's health, data released on Monday showed a decline in the German Ifo. The headline in June dropped from 91.5 to 88.5, below the market expectation of 90.7, while the Expectation Index tumbled from 88.3 to 83.6, and the Current Assessment fell from 94.8 to 93.7.
The European Central Bank's forum on central banking in Sintra has started, with many central bank officials worldwide in attendance. ECB President Lagarde will speak several times, as will other ECB policymakers, beginning on Tuesday. If the ECB wants to send a message to the market this week, it has an opportunity. Sticking to the current "data-dependent" mantra is the most likely scenario, signaling another rate hike in July.
Fed Chair Powell will speak on Wednesday at the Sintra forum, but surprises are unlikely. Following central bankers' talks, the focus will turn to inflation data, starting with Eurozone figures and then on Friday in the US with the Core Personal Consumption Expenditures. Those numbers will influence monetary policy expectations.
EUR/USD short-term technical outlook
-638234060622258835.png)
The EUR/USD held above the 55-day Simple Moving Average (SMA) that stood at 1.0880 and retook 1.0900 on Monday, but it was moving with little conviction amid low volume and limited price actions. The pair is offering mixed signals. The daily chart still shows the price above key bullish SMAs, with mixed technical indicators. A daily close above 1.1000 would open the door to more gains and fresh monthly highs.
On the 4-hour chart, the pair remains below the 20-SMA at 1.0930. Above it, short-term momentum will turn to the upside. On the contrary, a drop below 1.0880 could increase the bearish pressure, exposing the 1.0845/1.0850 support area (last week's low). Technical indicators are mixed, with the RSI and Momentum moving with no clear direction, around midlines.
View Live Chart for the EUR/USD
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.