EUR/USD Forecast: Euro bulls face tough test at 1.0650
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get Premium without limits for only $9.99 for the first month
Access all our articles, insights, and analysts.
UNLOCK OFFER- EUR/USD has preserved its bullish momentum at the beginning of the week.
- The dollar stays on the back foot with risk flows dominating the markets.
- Next key resistance for the pair is located at 1.0650.
EUR/USD has continued to edge higher at the beginning of the week after having gained nearly 150 pips last week The risk-positive market environment helps the pair push higher in the early European session and the next bullish target aligns at 1.0650.
Heightened optimism about China moving ahead with easing restrictions in Shanghai seems to be helping the market mood to remain upbeat early Monday. US stock index futures are up between 0.9% and 1.3% while the Euro Stoxx is rising 0.95% on a daily basis.
The data from Germany showed on Monday that the business sentiment surprisingly improved in May, providing an additional boost to the shared currency. Ifo economist Klaus Wohlrabe, however, noted that there were no signs of supply bottlenecks easing in the manufacturing and service sectors.
Meanwhile, European Central Bank President Christine Lagarde said over the weekend that they could hike the policy rate in July but pushed back against the idea of a 50 basis points rate increase amid heightened uncertainty surrounding the economic outlook.
In the second half of the day, the Federal Reserve Bank of Chicago will release the National Activity Index for April. In case risk flows continue to dominate the financial markets in the second half of the day, EUR/USD should be able to keep its firm footing.
EUR/USD Technical Analysis
EUR/USD holds above the ascending trend line coming from mid-May but the Relative Strength Index (RSI) indicator stays near 70. During the 10-day rebound, the pair staged a downward correction when the RSI moved into the overbought territory and a similar action could be witnessed in the near term.
On the downside, 1.0600 (psychological level) aligns as first support ahead of 1.0550 (static level, 20-period SMA). As long as the latter holds following a correction, the pair's bullish bias should remain intact.
1.0650 (200-period SMA, static level) forms next critical resistance for the pair. With a four-hour close above that level, additional gains toward 1.0700 (psychological level, static level) could be witnessed.
- EUR/USD has preserved its bullish momentum at the beginning of the week.
- The dollar stays on the back foot with risk flows dominating the markets.
- Next key resistance for the pair is located at 1.0650.
EUR/USD has continued to edge higher at the beginning of the week after having gained nearly 150 pips last week The risk-positive market environment helps the pair push higher in the early European session and the next bullish target aligns at 1.0650.
Heightened optimism about China moving ahead with easing restrictions in Shanghai seems to be helping the market mood to remain upbeat early Monday. US stock index futures are up between 0.9% and 1.3% while the Euro Stoxx is rising 0.95% on a daily basis.
The data from Germany showed on Monday that the business sentiment surprisingly improved in May, providing an additional boost to the shared currency. Ifo economist Klaus Wohlrabe, however, noted that there were no signs of supply bottlenecks easing in the manufacturing and service sectors.
Meanwhile, European Central Bank President Christine Lagarde said over the weekend that they could hike the policy rate in July but pushed back against the idea of a 50 basis points rate increase amid heightened uncertainty surrounding the economic outlook.
In the second half of the day, the Federal Reserve Bank of Chicago will release the National Activity Index for April. In case risk flows continue to dominate the financial markets in the second half of the day, EUR/USD should be able to keep its firm footing.
EUR/USD Technical Analysis
EUR/USD holds above the ascending trend line coming from mid-May but the Relative Strength Index (RSI) indicator stays near 70. During the 10-day rebound, the pair staged a downward correction when the RSI moved into the overbought territory and a similar action could be witnessed in the near term.
On the downside, 1.0600 (psychological level) aligns as first support ahead of 1.0550 (static level, 20-period SMA). As long as the latter holds following a correction, the pair's bullish bias should remain intact.
1.0650 (200-period SMA, static level) forms next critical resistance for the pair. With a four-hour close above that level, additional gains toward 1.0700 (psychological level, static level) could be witnessed.
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.