EUR/USD Forecast: Treading water around 1.0880 as investors await a catalyst
EUR/USD Current price: 1.0882
- US President Joe Biden stepped down from the presidential race.
- Financial markets stand cautious, but unable to find a directional strength.
- EUR/USD pressures its recent lows, downward corrective slide losing steam.
The EUR/USD pair trades uneventfully around the 1.0880 level, little changed from Friday’s close. Financial markets showed little reaction to weekend political news, as United States (US) President Joe Biden announced through a letter posted in X that he is stepping down from the presidential race. He also endorsed Vice-President Kamala Harris to lead the Democratic party into victory against Republican Donald Trump.
The US Dollar shed some ground at the weekly opening but ground higher afterwards, heading into the American opening with a firmer tone. Meanwhile, the macroeconomic calendar has little to offer. The US released the June Chicago Fed National Activity Index, which resulted in 0.05, down from the 0.23 posted in the previous month.
Other than that, European stocks trade with a positive tone, although Wall Street is set to open where it left off on Friday.
EUR/USD short-term technical outlook
From a technical point of view, the daily chart for the EUR/USD pair suggests the corrective decline is losing strength. Technical indicators retreated from overbought readings but turning flat well above their midlines. Furthermore, the pair remains well above all its moving averages, with a bullish 20 Simple Moving Average (SMA) heading north above directionless 100 and 200 SMAs.
In the near term, and according to the 4-hour chart, the risk skews to the downside. The 20 SMA gains downward traction above the current level while technical indicators consolidate within negative levels without signs of downward exhaustion. Finally, the 100 SMA maintains its bullish slope below the current level, providing dynamic support in the 1.0820 price zone.
Support levels: 1.0865 1.0820 1.0770
Resistance levels: 1.0910 1.0945 1.0990
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Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
