EUR/USD consolidates around 1.0700, just above one-and-a-half-month low touched on Friday

EUR/USD struggles to build on Friday’s bounce from its lowest level since early May.
Political uncertainty in Europe continues to undermine the Euro and cap the upside.
The Fed’s hawkish outlook acts as a tailwind for the USD and favors bearish traders.

Haresh Menghani FXStreet

The EUR/USD pair kicks off the new week on a subdued note and consolidates its recent heavy losses to the lowest level since early May, around the 1.0670-1.0665 region touched on Friday. Spot prices currently trade around the 1.0700 mark and seem vulnerable to extending the recent downward trajectory witnessed over the past two weeks or so.

The shared currency continues to be undermined by concerns that a snap election in France will worsen the fiscal situation in the Eurozone's second-largest economy, against the backdrop of a lead to the right-wing National Front party in the opinion polls. In fact, French Finance Minister Bruno Le Maire said on Friday that the country was at risk of a financial crisis if either the far right or left won because of their heavy spending plans. This, along with a modest US Dollar (USD) uptick, validates the near-term negative outlook for the EUR/USD pair.

The Federal Reserve's (Fed) hawkish surprise at the end of the June policy meeting, indicating a median projection of just one rate cut in 2024, remains supportive of elevated US Treasury bond yields. Apart from this, persistent geopolitical tensions in the Middle East turn out to be another factor underpinning the safe-haven Greenback, suggesting that the path of least resistance for the EUR/USD pair is to the downside. That said, signs of easing inflationary pressures in the US keep the door open for the first interest rate cut by the Fed in September.

The bets were further reinforced by the US data released on Friday, which showed that import prices unexpectedly fell in May and further boosted the domestic inflation outlook. Furthermore, a survey by the University of Michigan revealed that US consumer sentiment deteriorated sharply in June, which, in turn, might hold back the USD bulls from placing aggressive bets and help limit losses for the EUR/USD pair. There isn't any relevant economic data due for release from the US on Monday, leaving spot prices at the mercy of the USD.

EUR/USD

Overview
Today last price	1.0706
Today Daily Change	0.0001
Today Daily Change %	0.01
Today daily open	1.0705

Trends
Daily SMA20	1.0825
Daily SMA50	1.0773
Daily SMA100	1.0801
Daily SMA200	1.0789

Levels
Previous Daily High	1.0745
Previous Daily Low	1.0668
Previous Weekly High	1.0852
Previous Weekly Low	1.0668
Previous Monthly High	1.0895
Previous Monthly Low	1.065
Daily Fibonacci 38.2%	1.0697
Daily Fibonacci 61.8%	1.0715
Daily Pivot Point S1	1.0667
Daily Pivot Point S2	1.0629
Daily Pivot Point S3	1.059
Daily Pivot Point R1	1.0744
Daily Pivot Point R2	1.0783
Daily Pivot Point R3	1.0822

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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