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EUR/USD Forecast: Holding On To Higher Ground But Faltered Around A Strong Static Resistance Area

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EUR/USD Forecast: Holding On To Higher Ground But Faltered Around A Strong Static Resistance Area

EUR/USD Current Price: 1.1310

  • EU Sentix Investor Confidence plunged to -18.2 in July, missing the market’s expectations.
  • The US  ISM Non-Manufacturing PMI jumped to 57.1 in June from 45.4 in the previous month.
  • EUR/USD is holding on to higher ground but faltered around a strong static resistance area.

The EUR/USD pair has reached an intraday high of 1.1345, its highest since mid-June, easing towards the 1.1300 region during US trading hours. A rally in Asian equities was the main market driver throughout the first half of the day, amid optimism over an economic comeback among Chinese authorities. The EUR/USD pair advanced, despite discouraging EU data. German Retail Sales plunged by 29.3% YoY in May. The EU sales in the same period, however, declined by 5.1% YoY, better than anticipated. The Union also released the July Sentix Investor Confidence, which came in at -18.2 vs. the -10.9 expected.

The dollar managed to recover some ground on a positive US ISM Non-Manufacturing PMI, which jumped to 57.1 in June from 45.4 in the previous month, largely surpassing the market’s expectations. The Markit Services PMI for the same period was upwardly revised to 47.9 from a preliminary estimate of 46.7. Wall Street eased from intraday highs but closed with substantial gains.

Meanwhile, the number of coronavirus cases remains in the eye of the storm. After reporting over 55,000 new cases in one day last week, new contagions have been decreasing in the US, although they remain above 40,000 per day. On Tuesday, Germany will publish May Industrial Production, see up by 10% in the month, while the US will only release minor figures, the IBD/TIPP Economic Optimism for July and JOLTS Job Openings for May.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair has retreated from the upper end of its latest range, as it briefly surpassed the 1.1330 price zone. Nevertheless, it’s holing above a Fibonacci level at 1.1270, which maintains the risk skewed to the upside. The pair retains its bullish potential in the short-term, and the 4-hour chart shows that the pair is comfortable above all of its moving averages, and with the 20 SMA crossing above the 100 SMA. Technical indicators, in the meantime, remain within positive levels. A break below 1.1270 should put the pair back into neutral ground and diminish the chances of a bullish extension.

Support levels: 1.1270 1.1220 1.1170    

Resistance levels: 1.1345 1.1390 1.1425

Image sourced from Pixabay

 

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