EUR/USD Forecast: EUR/USD steady sub-1.0900 ahead of fresh clues

EUR/USD Current price: 1.0865

• A holiday in Europe and a scarce American calendar kept EUR/USD range bound.
• Germany and the Eurozone will release minor macroeconomic figures on Tuesday.
• EUR/USD consolidates last week’s gains; bulls paused but retained control.

 The EUR/USD saw little action on Monday, hovering around the 1.0860 mark for most of the day. A holiday in Europe and a scarce United States (US) macroeconomic calendar exacerbated the quietness around the pair throughout the day. Investors tried to find clues in comments from Federal Reserve (Fed) officials, who made different comments on the latest inflationary developments in the US. Overall, Fed members remained cautious about future actions, given that they still believe the disinflationary process is not certain.

Europe will return on Tuesday with some minor figures. Germany will publish the April Producer Price Index (PPI), which is foreseen at -3.2% YoY, easing from the previous -2.9%. Additionally, the Eurozone will release the March Current Account, which is expected to post a seasonally adjusted surplus of €30.2 billion. The EU will also publish the March Trade Balance, while the American session will feature another large batch of Fed speakers.

Meanwhile, Asian shares edged higher at the beginning of the week, leading to a positive opening among US indexes. However, the momentum faded mid-American afternoon, with the Dow Jones Industrial Average (DJIA) turning sharply lower, while the S&P500 and the Nasdaq Composite held on to uneven gains. Finally, it is worth adding the US Dollar retained the soft tone despite a modest uptick in government bond yields.

EUR/USD short-term technical outlook

From a technical point of view, the EUR/USD pair is poised to extend its advance. The daily chart shows the pair develops above all its moving averages, with a 20 Simple Moving Average (SMA) approaching the longer ones from behind with a strong positive momentum, supporting another run higher, particularly if the pair finally breaks through the 1.0900 threshold. At the same time, technical indicators remain near overbought readings, although with uneven strength. The Relative Strength Index (RSI) indicator aims marginally lower, suggesting easing buying pressure.

The 4-hour chart offers a neutral technical stance. EUR/USD is currently hovering around its 20 SMA, which loses bullish strength but still heads north. At the same time, the longer moving averages keep heading higher, although roughly 100 pips below the current level, losing relevance. Finally, technical indicators are stuck around their midlines,  reflecting decreased speculative interest ahead of Wall Street’s closing.

Support levels: 1.0830 1.0795 1.0750

Resistance levels: 1.0890 1.0920 1.0960