- EUR/USD again struggles to keep gains above the 200-week SMA.
- A big beat on the German IFO Expectations may lift the pair above the key hurdle.
- US fiscal stimulus talk could keep the dollar under pressure.
EUR/USD has added nearly 150 pips so far this week. However, bulls are yet to clear key resistance, which has repeatedly capped upside this year.
The currency pair is currently trading near 1.1316, having begun the week at 1.1173 and printed a high of 1.1349 on Tuesday. The pullback from 1.1349 to 1.1173 marks the failure on the part of the bulls to keep gains above the 200-week simple moving average (SMA), currently at 1.1331.
Moreover, the pair has failed multiple times over the last three weeks to establish a strong foothold above that SMA hurdle. Similarly, the break above the 200-week SMA seen in early March was short-lived. That is evident the long upper wick attached to the candle representing price action seen in the first week of March.
Hence, a convincing weekly close above the 200-week SMA could bring in stronger chart-driven buying, leading to significant gains.
The breakout, however, hinges on the German IFO data for June, scheduled for release on Wednesday at 08:00 GMT. The focus would be on the forward-looking Expectations index, which is forecasted to rise to 87.00 from the preceding month's print of 80.1.
A big beat on estimates would reinforce market expectations for faster recovery in the Eurozone's largest economy and may strengthen the bid tone around the shared currency. Moreover, the economic activity has recovered somewhat since the March crash. Manufacturing and service sector activity improved in Germany in June, the preliminary PMIs released on Tuesday showed.
Apart from the IFO numbers, the pair may take cues from the broader market sentiment. The talk of a new $1 trillion-plus stimulus package in the US is likely to keep equities bid and the safe-haven US dollar under pressure.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
-637336005550289133_XtraSmall.jpg)
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.