EUR/USD Price Forecast: Bulls hold the grip

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1374

United States markets will remain closed on holidays, market moving on sentiment.
The Federal Open Market Committee will release the Minutes of the May meeting on Wednesday.
EUR/USD eases from a fresh multi-week peak, downside potential seems limited.

The EUR/USD pair advanced towards 1.1420 on Monday amid persistent US Dollar (USD) weakness on the back of renewed trade tensions. United States (US) President Donald Trump threatened a "straight 50% tariff" on imports from the European Union (EU), after stating their discussions were going nowhere. The levies were to be imposed starting June 1, although Trump announced on Sunday an extension until July 9 after a phone call with European Commission President Ursula von der Leyen.

The USD recovered some ground during European trading hours, with EUR/USD hovering at around 1.1370 early in the American session.

A holiday in the US and Canada will keep market action contained until the next Asian opening. In the meantime, the macroeconomic calendar has nothing relevant to offer until Wednesday, when the Federal Open Market Committee (FOMC) will release the Minutes of the May meeting. The document should not bring surprises, and hence, had a limited impact on the USD.

Comments from Federal Reserve (Fed) officials, on the other hand, could be a bit more interesting should they change their usual wording towards future action. Still, such a scenario seems unlikely, moreover, after Trump’s threats on fresh levies.

EUR/USD short-term technical outlook

From a technical point of view, the daily chart for the EUR/USD pair holds on to modest intraday gains, offering a neutral-to-bullish stance. The pair develops well above a pretty much flat 20 Simple Moving Average (SMA), providing support at around 1.1270. At the same time, the 100 SMA is crossing above the 200 SMA in the 1.0810 region, reflecting bulls’ dominance. Finally, the Momentum indicator is stuck around its 010 line, while the Relative Strength Index (RSI) indicator aims north at around 59, supportive of another leg higher.

In the near term, and according to the 4-hour chart, EUR/USD lost upward momentum, although a steeper decline remains out of the picture. The pair develops above all its moving averages, which maintain their bullish slopes. Technical indicators, in the meantime, ease within positive levels, with limited downward strength.

Support levels: 1.1330 1.1270 1.1240

Resistance levels: 1.1420 1.1460 1.1505

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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.

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