EUR/USD defends 20-month MA for the third consecutive month

The EUR/USD pair defended the 20-month moving average (MA) support in the past three consecutive months.
The pair may pick up a strong bid if the Fed adopts a cautious tone.

Omkar Godbole FXStreet Contributor

The EUR/USD could be in for a stronger rally to 1.20, having defended the 20-month moving average for the third straight month in July.

The monthly chart shows the currency pair has charted back-to-back doji candles along the 20-month MA support, signaling indecision or bearish exhaustion following a drop from the February high of 1.2556.

Consequently, the common currency looks overdue for a corrective rally. At press time, the EUR/USD is trading at 1.1680.

Focus on the Fed

Federal Reserve (Fed) is expected to keep interest rates unchanged at 1.75-2.00% today, having lifted borrowing costs by 25 basis points in June. The absence of a post-meeting press conference and new economic projections also makes the July meeting a less exciting event.

Nevertheless, investors will scan the policy statement for clues on whether the US President Trump's criticism of rate hikes is forcing the Fed to adopt a more tempered tone.

The EUR/USD could rise if the Fed tempers hawkish tone. On the other hand, the pair may fall back to the key support of 20-month MA, currently located at 1.1623 if the central bank downplays trade war fears and retains hawkish rhetoric.

EUR/USD Technical Levels

Resistance: 1.1747 (previous day's high), 1.1791 (July 6 high), 1.1852 (June 14 high).

Support: 1.1674 (50-day moving average), 1.1620 (lower Bollinger Band as per the daily chart), 1.1508 (June 21 low).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Strongly Bearish	Neutral	High
1H	Bearish	Oversold	Shrinking
4H	Bearish	Neutral	Shrinking
1D	Bullish	Neutral	Shrinking
1W	Bearish	Neutral	Expanding
Updated Aug 1, 04:15 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

AUD/USD falls to near 0.7100 after slipping below 50-day EMA

AUD/USD depreciates after registering minor gains in the previous day, trading around 0.7120 during the Asian hours. The technical analysis of the daily chart shows the pair consolidating sideways within a rectangle pattern, as neither bulls nor bears gain control. The AUD/USD pair is holding a slight bearish tone however as it sits beneath both the nine-day and 50-day EMAs.

160.00: USD/JPY back near intervention territory after upbeat US jobs report

US Nonfarm Payrolls beat expectations by a wide margin in May, with 172K jobs added. The US Dollar rebounds after the release, helping USD/JPY recover from its intraday lows. Warnings from Japanese authorities continue to limit upside potential near the 160.00 threshold.

Gold targets $4,300 amid stronger Dollar

Gold faces increasing selling interest and navigates the area of three-month lows near the $4,300 mark per troy ounce on Friday. The precious metal’s decline comes as traders assess the stronger-than-expected NFP, while the bid bias in the Greenback and higher US Treasury yields also collaborate with the retracement.

Cardano hits five-year low even as Hoskinson clarifies "break" isn't an exit

Cardano (ADA) price is down 10% at press time on Friday, extending losses over 30% so far this week amid Charles Hoskinson's clarification that "break" isn't an exit.

Week ahead – Fed countdown begins amid US inflation data and geopolitical risks

Fed Chair Warsh’s first meeting approaches as key US inflation data could reshape expectations. Oil prices remain elevated as US-Iran talks continue; tariffs also return to the spotlight. ECB is expected to hike; will it be a one-off move or is July live?

The US economy defies the rules: 100 days into the Oil shock and the recession signal is still missing

More than three months after the start of the Iran war and the resulting disruption to global energy markets, the US economy continues to display remarkable resilience. The conflict has triggered a sharp rise in Oil prices, reignited inflationary pressures and fueled widespread concerns about a potential economic slowdown.