EUR/USD Forecast: Higher in range, bulls still reluctant

EUR/USD Current Price: 1.1803

• The German July IFO Business Climate came in at 100.8 contracting from 101.7 previously.
• Market participants were cautious ahead of US first-tier events.
• EUR/USD higher in range but stuck to 1.1800, further gains not yet clear.

The dollar started the week with a soft tone, easing against most major rivals. The EUR/USD pair reached an intraday high of 1.1816, ending the day above the 1.1800 figure for the first time in over a week. Caution took over financial markets ahead of US first-tier data later in the week. Stocks seesawed between gains and losses but held around their daily opening levels, while US Treasury yields held near their opening levels.

Data-wise, the German July IFO Business Climate came in at 100.8 contracting from 101.7 and below the expected 102.1, as expectations and the assessment of the current situation deteriorated. The US published June New Home Sales, which dropped to 676K, down 6.6% in the month. The Dallas Fed Manufacturing Business Index for July contracted from 31.1 to 27.3.  On Tuesday, the focus will be on UK June Durable Goods Orders, foreseen up 2.1% MoM.

EUR/USD short-term technical outlook

The EUR/USD pair hovers around 1.1800 ahead of the Asian opening and has room to extend its advance. The 4-hour chart shows that it is currently a handful of pips above the roof of a daily descendant channel coming from June 25, while buyers defended the downside around a mildly bullish 20 SMA. On the other hand, bearish 100 SMA limited the upside. Technical indicators had lost directional strength after entering positive territory, indicating that buyers are still reluctant to add.

Support levels: 1.1795 1.1750 1.1705  

Resistance levels: 1.1840 1.1885 1.1920

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