EUR/USD Forecast: Wait-and-see continues amid ruling uncertainty

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1237

The US reported fewer cases of coronavirus but could be due to the usual weekend lags.
US Federal Reserve Chief Powell will testify before Congress this Tuesday.
EUR/USD is holding on to familiar levels amid the absence of clear clues.

The EUR/USD pair surged to 1.1287 this Monday, changing course during US trading hours to close the day little changed on the upside in the 1.1230 price zone. Financial markets struggled with pandemic-related headlines throughout the day, as the number of cases has continued to rise over the weekend, mainly in the US Southern States. European equities posted modest daily gains, while US indexes followed the lead, with a bit more momentum. The US reported fewer cases this Monday, but there’s a trick to the improvement: usually, the number of cases reported during the weekend decreased, although Arizona informed that one of its testing centers didn’t provide an update, while is a well-known trend that fewer cases are reported on Mondays amid fewer testing and delays during the weekend.

German inflation beat estimates according to June preliminary estimates, recovering from 0.5% to 0.8% YoY. However, the EU Economic Sentiment Indicator for the same month printed at 75.7 from 80 in the previous month. The US, on the other hand, published May Pending Home Sales, which were down by 5.1% YoY against the expected -44.6%, and the Dallas ed Manufacturing Business Index for June, which improved from -49.2 to -6.1.

This Tuesday, the EU will publish the preliminary estimate of June inflation data, while the US will release the Chicago PMI for June, seen at 45 from 32.3. More relevant, Fed’s head Powell, along with Treasury Secretary Steven Mnuchin, will testify before the House Financial Services Committee.

EUR/USD short-term technical outlook

The EUR/USD pair is hovering around 1.1230 as the day comes to an end, neutral in the short-term. The early attempt to surpass a Fibonacci resistance failed, reflecting the absence of interest. In the 4-hour chart, the pair is trading below a mildly bearish 20 SMA, also below the 100 SMA. Technical indicators, in the meantime, hover around their midlines. The downside is being contained by buyers aligned around 1.1170, while the pair would need to break above 1.1310 to turn bullish.

Support levels: 1.1170 1.1125 1.1080

Resistance levels: 1.1270 1.1310 1.1350

View Live Chart for the EUR/USD

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.

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