EUR/USD settles below 1.12 as traders prepare for a busy week
|The EUR/USD pair struggled to find a short-term direction on Monday as the trading volume remained low due to the holiday in the U.K. and the U.S. Ahead of a busy calendar week, the pair is trading at 1.1172, losing only 9 pips on the day.
On Tuesday, confidence surveys from the euro area will be followed by Germany's inflation figures for May, which is expected to ease to 1.6% from 2.0% in April on a yearly basis. Later in the day, the Federal Reserve's favorite inflation gauge, the Personal Consumption Expenditures (PCE) Price Index, will be the highlight of the day at the beginning of the NA session. An increase in that data could confirm a rate hike in June, increasing the demand for the greenback through rising U.S. Treasury-bond yields.
Earlier today, ECB's Draghi crossed the wires, but his statements on the economy and the monetary policy were largely ignored by the market participants as he essentially repeated what he said in the latest ECB press conference.
- Draghi speech: There are some signs of pickup in inflation
- Draghi Speech: Economic upswing is becoming solid
According to FXStreet analyst Valeria Bednarik, the technical picture for the pair favors a downward extension in the short-term, although it will remain corrective due to ongoing dollar's weakness, unless the pair returns to territory sub-1.1000. She further adds that in the 4 hours chart, technical readings present a neutral-to-bearish stance, with the price contained below a horizontal 20 SMA, and technical indicators heading marginally lower within the negative territory. Bednarik identifies supports at 1.1160, 1.1120 and 1.1080, and resistances at 1.1220, 1.1260 and 1.1300.
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