EUR/USD Price Forecast: Buyers lead amid a better mood

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1664

Trade tensions between the United States and the European Union in focus.
The European Central Bank will announce its decision on monetary policy next Thursday.
EUR/USD is bullish in the near term, needs to run past 1.1700 to confirm additional gains.

The EUR/USD pair is in recovery mode on Monday, as a better market mood underpins demand for the high-yielding Euro (EUR). In the absence of relevant news, the focus remains on trade-related headlines, particularly on a trade deal between the United States (US) and the European Union (EU).

US Commerce Secretary Howard Lutnick said on Sunday he was confident a trade deal could be struck with the EU, yer added that the deadline of August 1 for a baseline 30% tariff is fixed. Meanwhile, the EU said it is preparing retaliatory tariffs, having already announce a first round worth 21 billion euros and preparing a second round of levies worth 72 billion euros.

Data-wise, the macroeconomic calendar has little to offer at the beginning of the week, turning more interesting on Thursday, when the European Central Bank (ECB) is scheduled to announce its decision on monetary policy, while the Hamburg Commercial Bank (HBOC) and S&P Global will release the preliminary estimates of the July Purchasing Managers’ Indexes (PMI) for both economies.

EUR/USD short-term technical outlook

From a technical point of view, the daily chart for the EUR/USD pair shows it is up for a second consecutive day, while still developing below a flat 20 Simple Moving Average (SMA), which stands directionless at around 1.1700. The 100 SMA, in the meantime, keeps advancing far below the current level, aligned with the dominant bullish trend. Finally, technical indicators remain within negative levels, with mildly upward slopes which reflect the ongoing recovery but fall short of suggesting another leg higher.

In the near term, and according to the 4-hour chart, the pair is bullish. EUR/USD develops above mildly bullish 20 and 200 SMAs, while technical indicators aim north within positive levels, surpassing last week’s highs. The same chart shows that a flat 100 SMA lies around 1.1705, reinforcing the static resistance area.

Support levels: 1.1635 1.1600 1.1560

Resistance levels: 1.1710 1.1755 1.1790

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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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