EUR/USD forecast: Outlook remains tilted in favour of bearish traders, 1.1100 marks a key support

The EUR/USD pair regained some positive traction on the first day of a new week and recovered the previous session's downtick, albeit remained well within the post-ECB trading range. The uptick lacked any obvious fundamental catalyst and was solely triggered by some cross-driven strength, stemming out of a strong upsurge in the EUR/GBP cross led by a free-fall in the British Pound. 

Meanwhile, the US Dollar stood tall near a two-month high and remained well supported by Friday's stronger-than-expected US Q2 GDP report, which further dampened prospects for an aggressive interest rate cut by the Fed and kept a lid on any strong follow-through. The pair climbed to mid-1.1100s, albeit struggled to capitalize on the move and traded with a mild negative bias through the Asian session on Tuesday.

Moving ahead, Tuesday's releases of the German GFK Consumer Confidence and the preliminary July consumer inflation figures will influence the broader market sentiment surrounding the shared currency. Later during the early North-American session, the US economic docket - featuring the release of Personal Income and Spending data for June, the core PCE price index (the Fed's preferred inflation gauge), followed by the Conference Board's Consumer Confidence Index might further collaborate towards producing some meaningful trading opportunities.

The key focus, however, will remain on the highly anticipated FOMC decision, scheduled to be announced during the US trading session on Wednesday, which will play an important role in determining the pair's next leg of a directional move.

From a technical perspective, nothing seems to have changed for the pair except that the 1.1150 region now seems to have emerged as an immediate resistance. Momentum beyond the mentioned hurdle could get extended towards the 1.1185-90 region - the previous horizontal support break-point, above which a bout of short-covering could lift the pair back towards challenging the 1.1270-80 heavy supply zone – nearing 100-day EMA.

On the flip side, the post-ECB swing lows - around the 1.1100 round figure mark, remains a key pivotal point for short-term traders, which if broken might trigger some aggressive selling and accelerate the slide further towards 1.1070 intermediate support. A follow-through weakness has the potential to continue dragging the pair further towards testing the key 1.1000 psychological mark in the near-term.