EUR/USD Forecast: Drifting higher ahead of Powell's power-play

The EUR/USD is extending its gains above 1.1700, trading in limited ranges. The US Dollar is generally on the back foot as no news is good news for financial markets and not-so-great news for the greenback. Nevertheless, the broader trend is USD-positive. 

Worsening trade relations favor the American currency as it is currently outperforming its peers and may remain at this position even if all economies suffer from tariffs, counter-tariffs, and other non-tariffs barriers.

President Donald Trump met his counterpart Vladimir Putin on Monday in Helsinki. The encounter created extraordinary headlines from Trump, which seemed to believe Putin's "strong denial" of meddling in the US elections more than America's intelligence services. However, there were no market-moving headlines. 

The focus now shifts to the all-important testimony by Fed Chair Jerome Powell. The world's most powerful central banker goes to Capitol Hill, and his agenda is packed. The Federal Reserve will first release his prepared statement before he reads it out and then answers lengthy questions from Senators today, and House representatives tomorrow. Trade and inflation are high on the agenda.

See: Powell preview: 5 market-moving topics to look out for

In the old continent, there are no significant events today, leaving the stage to Powell. 

EUR/USD Technical Analysis

The EUR/USD broke above downtrend resistance on Monday. It did in an unspectacular manner, ticking up and holding its ground. This is a bullish sign. Momentum is marginal to the upside while the Relative Strength Index is rising gently.

Resistance awaits at 1.1760 which was a swing high on July 12th. 1.1795 was the peak on July 9th and remains of importance. The June 14th high at 1.1850 is next. 

Looking down, 1.1695 capped the pair on July 13th and served as support on the 10th. Further support is at 1.1665 which was a swing low on the 11th and 1.1590 that was the low point of the month so far.