EUR/USD Forecast: Bulls refuse to give up

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1240

United States Retail Sales posted a modest 0.2% monthly advance in June.
Stock markets trade with a sour tone, providing modest support to the US Dollar.
EUR/USD corrective decline in the makes, although clearer once below 1.1180.

The EUR/USD pair peaked on Tuesday at 1.1275, its highest since February 2022, currently trading at around 1.1240 ahead of the American session opening. The pair spent the first half of the day seesawing between gains and losses, with the US Dollar finding some temporal support in a worsening market mood, as reflected by the poor performance of Asian and European equities.

At the same time, the lack of relevant macroeconomic headlines maintained the pair within familiar levels. Things worsened following the release of the United States (US) Retail Sales, which came in worse than anticipated. Sales were up a measly 0.2% MoM in Jun, although the core reading, Retail Sales Control Group, printed at 0.6%, much better than the -0.3% expected. Stock markets accelerated their slides, providing additional support to the USD.

EUR/USD short-term technical outlook

From a technical point of view, the pair retains its bullish bias. In the daily chart, EUR/USD keeps advancing well above bullish moving averages, with the 20 Simple Moving Average accelerating north above the longer ones. At the same time, the Momentum indicator gains upward traction at fresh multi-month highs, while the Relative Strength Index (RSI) indicator extends its consolidative phase within overbought levels.

In the near term, the case for a bearish correction is more evident. The 4-hour chart shows that EUR/USD is pressuring a bullish 20 SMA while technical indicators accelerated their slides. The Momentum indicator is crossing its 100 level into negative territory, while the RSI finally left extreme overbought territory, now standing at around 68. Finally, the 100 and 200 SMAs maintain their firmly bullish slopes far below the current level, in line with the dominant trend.

Support levels: 1.1180 1.1150 1.1110

Resistance levels: 1.1250 1.1295 1.1230

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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