- EUR/USD has recovered from the lows as the market mood improves.
- US Retail Sales and tensions toward Wednesday's Fed decision are in play.
- Tuesday's four-hour chart is showing that bears remain in the lead.
Now comes the hard part – after EUR/USD has bounced off the lows recorded on Friday, it has a steeper hill to climb. The recent upswing can be attributed to the improving market mood and falling US Treasury yields. The safe-haven dollar is falling.
However, it is essential to note that the moves are minimal and seem more like profit-taking than the real thing. Traders are at the edge of their seats ahead of Wednesday's all-important Federal Reserve decision. Will the bank hint at tapering down its $120 billion/month? Have additional members moved toward raising interest rates in 2022?
See Federal Reserve Preview: First up, then down? Playbook for trading the Fed
In the meantime, traders have another top-tier US event to follow – Retail Sales figures for May. The consumption-centered economy saw substantial fluctuations in recent months as Americans spent their stimulus checks and were able to do so amid the rapid reopening. For May, the economic calendar is pointing to moderate changes.
It seems more likely than not that America's shopping spree extended into May. Together with potentially upbeat producer prices statistics, the dollar has room to recover.
See US May Retail Sales Preview: Analyzing major pairs' reaction to previous releases
On the other side of the pond, Europe's vaccination campaign continues at full speed and COVID-19 cases continue falling. The Delta variant is spreading around Britain, yet it has yet to raise the number of cases in the old continent. 
Source: FT
While this positive development supports the common currency, markets currently focus on the US, and better than estimated figures from Americans could outweigh the gradual and well-known improvement in the old continent.
EUR/USD Technical Analysis
Euro/dollar is now facing critical resistance at 1.2150, which is where the 50 and 200 simple moving averages on the four-hour chart converge. Moreover, that level provided support to the pair last week. Break or bounce? Momentum remains to the downside and the short-term trend is bearish as well – lower lows and lower highs.
Support is at 1.2115, which is the daily low. It is followed by 1.2090, Friday's trough. Further down, 1.2050 and 1.2015 await the pair.
Resistance above 1.2150 is at 1.2165, followed by 1.2220 and 1.2250.
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