EUR/USD Forecast: Bulls are not willing to give up
|EUR/USD Current Price: 1.0896
- S&P Global downwardly revised the June Eurozone Manufacturing PMIs.
- This week's focus is on United States employment-related data ahead of the NFP report.
- EUR/USD struggles to recover the 1.0900 threshold, but bears remain out of the picture.
The US Dollar kick-started the week with a positive footing, advancing against most major rivals. EUR/USD fell during European trading hours to 1.0869 and trades below the 1.0900 threshold ahead of the American opening.
Market players welcomed US inflation-related figures indicating price pressures receded further in May, according to the PCE Price Index. The annual figure printed at 3.8% YoY, posting the smallest increase in over two years. The USD came under modest selling pressure amid a better mood flipping attention to high-yielding assets.
Government bonds were quiet by the end of last week but are up on Monday, providing a near-term boost to the American currency. The 10-year Treasury note currently yields 3.86%, up 4 basis points (bps), while the 2-year note offers 4.95%, up 7 bps and nearing the critical 5% threshold.
Data-wise, S&P Global published the final estimates of the June Manufacturing PMIs for the Eurozone, which suffered downward revisions. The German index was confirmed at 40.6, below the previous estimate of 41, while the EU figure printed at 43.4. S&P Global will publish the United States (US) manufacturing PMI later in the day, while the official ISM Manufacturing PMI will be out after Wall Street's opening. This week's focus will be on employment, as the US will publish multiple employment-related reports ahead of the Nonfarm Payrolls one on Friday.
EUR/USD short-term technical outlook
The daily chart for the EUR/USD pair shows that the bullish momentum continues to fade, although bears remain out of the picture. The pair is meeting buyers around a bullish 20 Simple Moving Average (SMA), which keeps advancing above the longer ones. Technical indicators, however, offer neutral-to-bearish slopes within positive levels, indicating the lack of substantial buying interest.
In the near term, and according to the 4-hour chart, the risk skews to the upside, although additional confirmations are required. Technical indicators are gaining upward traction within neutral levels as EUR/USD struggles to regain the 1.0900 threshold. At the same time, the pair develops above its 100 and 200 SMAs but is having a hard time extending its advance above a bearish 20 SMA, converging with the current level. Bulls may have better chances if the pair runs past 1.0940, a static resistance level.
Support levels: 1.0870 1.0825 1.0790
Resistance levels: 1.0940 1.0985 1.1040
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