EUR/USD Forecast: Bulls ready to challenge a strong resistance level

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1134

Markit Manufacturing PMIs confirmed profound economic damage from coronavirus pandemic.
Tensions between the US and China kept escalating, equities advanced anyway.
EUR/USD bullish, could run to 1.1240 on a break above 1.1150 price zone.

The greenback started the day with the wrong footing, edging lower against most major rivals. The EUR/USD pair peaked at 1.1153, and settled above 1.1120, with modest intraday gains. The dollar suffered ever since the day started amid protests spreading across the US and turning more violent over the weekend. The shared currency retreated after the final versions of Markit Manufacturing PMIs for the Union showed a modest bounce from record lows, although “still indicated a considerable rate of contraction in operating conditions,” according to the official report. The EU May Manufacturing PMI was confirmed at 39.4. The US index for the same month was confirmed at 39.8, as previously estimated. Meanwhile, the official ISM Manufacturing PMI bounced from 41.5 in April to 43.1 in May, missing the market’s forecast.

Equities edged higher despite market talks suggesting China could halt some US agricultural goods’ imports, although several European markets remained closed amid a local holiday. This Tuesday, the macroeconomic calendar for the EU and the US will be quite light, with just minor data scheduled to release in America.

EUR/USD short-term technical outlook

The EUR/USD pair has stabilised in the 1.1130 price zone during the US afternoon, retaining its short-term bullish stance ahead of Tuesday’s opening. The 4-hour chart shows that the 20 SMA continues advancing below the current level but above the larger ones, as technical indicators resumed their advances after correcting overbought conditions. As mentioned in a previous update, the 1.1150 area is quite a tough resistance. Once above the level, the pair has room to extend its advance to 1.1240, the next relevant resistance level.

Support levels: 1.1065 1.1020 1.0970

Resistance levels: 1.1150 1.1190 1.1240

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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