EUR/USD analysis: ranging ahead of Powell, Draghi

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1580

Buyers remain sidelined around the EUR/USD pair hoping central banks' heads could give some hints.
Risk aversion amid escalating trade war ebbed but nothing changed between China and the US.

The EUR/USD pair trades in the 1.1560/80 region confined to a tight intraday range and capped by selling interest around 1.1600. Dovish remarks from ECB's Draghi at the Central Banking Forum in Portugal Monday, despite bringing nothing new to the table, kept speculative interest away from the common currency. Stocks are performing better after yesterday's sell-off, but the catalyst of such slump, an escalating trade war between China and the US, remains unchanged, with no relief headlines backing the improved market's sentiment.

Germany released May PPI, which came better-than-expected, up 0.5% in the month and 2.7% when compared to a year earlier. In the US MBA Mortgage approvals rose 5.1% in the previous week, improving from -1.5%, while the current account for Q1 resulted at $-124.1B, better than the $-129.0B expected. Alongside with Wall Street's opening, the heads of major central banks will be participating in a discussion panel, including ECB's Draghi and Fed's Powell.

Technically, the 4 hours chart shows that the pair is stuck in a consolidative range not far above its yearly low of 1.1509, still the key support to break to confirm additional declines ahead. In the 4 hours chart, the 20 SMA has turned horizontal, acting as a dynamic resistance around 1.1595, while technical indicators lack directional strength, the Momentum around its mid-line and the RSI at 41, all of which suggests that bulls are still away from the pair. Renewed selling interest below 1.1550 will likely result in a test of the mentioned yearly low.

Support levels: 1.1550 1.1510 1.1460

Resistance levels: 1.1595 1.1630 1.1660

View Live Chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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