EUR/USD outlook: Recovery attempts face headwinds on fading risk sentiment and weak techs
EUR/USD
The Euro stood at the front foot in Asia / early Europe on Monday but gains were so far limited and capped at 1.1270 zone (20DMA/Fibo 38.2% of 1.1422/1.1168 bear-leg.
Weaker dollar inflated the single currency but risk sentiment is fading as markets fear that rising numbers of new coronavirus cases and death toll that topped half a million would further undermine hopes for economic recovery.
Today's advance after Friday's Doji and Thursday's close in red signals formation of reversal pattern, however, daily techs are weak as bearish momentum continues to strengthen, stochastic is heading south and the price action faces headwinds from 20DMA, keeping near-term picture rather neutral.
Market focus Germ inflation data for June as key event in European session (June m/m 0.3%f/c vs -0.1% prev, annualized unchanged at 0.6%) which is expected to provide more details about the situation in the biggest bloc's economy and provide positive signal on better than expected release.
Across the ocean, US pending home sales is the top event (May 19.7% vs -21.8% in Apr) which could boost risk sentiment on strong figures.
Session high at 1.1270 marks pivotal barrier, break of which would spark fresh upside and expose next important levels at 1.1325 (Fibo 61.8% of 1.1422/1.1168) and 1.1348 (23 June high). On the other side, session low (1.1216) marks initial support which guards 1.1190 (Thursday's low) and pivotal 1.1175/68 supports (Fibo 38.2% of 1.0774/1.1422 /19 June low).
Res: 1.1270; 1.1300; 1.1325; 1.1348
Sup: 1.1239; 1.1216; 1.1190; 1.1175
Interested in EUR/USD technicals? Check out the key levels
Author
Slobodan Drvenica
Windsor Brokers
Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.
