EUR/USD Forecast: Bulls hold the grip ahead of Powell’s words

EUR/USD Current price: 1.0907

• Federal Reserve Chairman Jerome Powell will speak at the Economic Club of Washington.
• Financial markets lifted bets former President Donald Trump would win upcoming elections.
• EUR/USD bullish momentum receded in the near term, but sellers remain side-lined.

The EUR/USD pair trades in the 1.0900 price zone, near the intraday peak at 1.0919, its highest since mid-March. The US Dollar started the day with a firmer tone, gaping higher vs most major rivals following the weekend events in the United States (US). Former President Donald Trump and the current candidate of the Republican Party suffered an assassination attempt while attending a campaign rally event.

Fears initially hit financial markets, but as the dust settled, optimism returned. Market players increased bets Trump would win the presidential election and implement a more liberal fiscal programme, fueling risk appetite.

Data-wise, Eurizone published May Industrial Production data, which resulted better than anticipated, falling 0.6% in the month against the -1% anticipated. Across the pond, the US published the NY Empire State Manufacturing Index, which fell more than anticipated to -6.6.

Federal Reserve (Fed) Chairman Jerome Powell is due to speak at the Economic Club of Washington DC after Wall Street’s opening, and audience questions are expected. Speculative interest will be looking for clues on upcoming monetary policy movements. The week will be flooded with comments from US policymakers ahead of the upcoming monetary policy meeting on July 31.

EUR/USD short-term technical outlook

The EUR/USD pair maintains the positive tone, although it trades below Friday’s close. Nevertheless, the daily chart shows it posted a fourth consecutive higher high and higher low, in line with a bullish continuation. Technical indicators in the mentioned time frame offer neutral-to-bullish slopes near overbought readings and without signs of upward exhaustion. Finally, EUR/USD extends its advance above all its moving averages, with the 20 Simple Moving Average (SMA) heading firmly north, although still below the 100 and 200 SMAs.

In the near term, and according to the 4-hour chart, however, buyers seem to be on pause. Technical indicators turned flat, reflecting receding interest, yet sellers are nowhere to be found. Additionally, EUR/USD keeps developing above all its moving averages, with the 20 SMA maintaining its bullish slope above the longer ones, and providing dynamic support at around 1.0870.

 Support levels: 1.0870 1.0835 1.0790

Resistance levels: 1.0940 1.0990 1.1020