EUR/USD Forecast: Consolidation extends amid the absence of fresh clues

EUR/USD Current Price: 1.0895

• A holiday in the United States exacerbates range trading on Tuesday.
• Speculative interest awaits American employment-related data for direction.
• EUR/USD extends its consolidative phase, with the risk skewed to the upside.

Financial markets continued to trade uneventfully early on Tuesday, with major pairs confined to familiar ranges. The EUR/USD pair peaked at 1.0915 but currently trades around the 1.0900 threshold, unable to attract speculative interest. A holiday in the United States (US) exacerbates the quietness as local markets will remain closed due to the observance of Independence Day.

The European macroeconomic calendar offered little of relevance. Germany published the May Trade Balance, which posted a seasonally adjusted surplus of €14.4 billion, below the previous €18.4 billion and also missing the market’s expectations.

Generally speaking, the US Dollar is weaker against most major rivals, with commodity-linked currencies making the most of the picture. The Euro, however, fell out of investors’ radar amid Asian and European equities trading mixed not far from their opening levels.

Market participants will likely maintain the wait-and-see stance ahead of more relevant news scheduled throughout the rest of the week. On Wednesday, S&P Global will publish the final estimate of the Services PMIs for major economies, while the Eurozone will unveil the May Producer Price Index (PPI), expected to have declined by 1.8% in the month and by 1.3% from a year earlier. Later in the week, the US will publish the ADP Survey on private job creation alongside other employment-related figures to end the week by releasing the June Nonfarm Payrolls report.

EUR/USD short-term technical outlook  

The EUR/USD pair trades little changed from the weekly opening, with the daily chart reflecting the lack of speculative interest but still far from signaling an upcoming slide. The pair keeps developing above a bullish 20-day Simple Moving Average (SMA), which advances above the longer ones. In the meantime, the Momentum indicator extended its decline within positive levels, now approaching the 100 mark. Finally, the Relative Strength Index (RSI) indicator hovers around 52 without clear directional strength.

The near-term picture is neutral, although little action should be expected with American markets closed. The 4-hour chart shows that the pair trades around its 20-period and 100-period SMAs, both converging in the 1.0890 price zone, while the 200-period SMA remains directionless at around 1.0815. Meanwhile, technical indicators remain flat within neutral levels, grinding marginally higher ahead of Wall Street’s opening.

Support levels: 1.0860 1.0815 1.0770

Resistance levels: 1.0940 1.0985 1.1040

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