EUR/USD has eyes on 1.20 ahead of US ISM, FOMC on the horizon

The Euro heads into a thunderously quiet Tuesday session with European markets on holidays.
US ISM PMI, FOMC on Thursday to produce most of the pair's volatility heading forward.

Joshua Gibson FXStreet

The EUR/USD is trading flat ahead of the European market session, trading near 1.2075.

It's been a brutal run for the Euro lately, with the pair bottoming out of 2018's familiar range and tumbling almost 3% in a matter of weeks, falling from April's high of 1.2413.

EUR/USD analysis: bouncing within range, bearish below 1.2160

Tuesday promises to be a volume-thin day with the major European markets shuttered for Labor Day; institutional market participants will be missing from the action, but the Dollar side is still looking alive this week after the pair fell again on Monday, keeping bearish pressure on the Euro.

The US session will see American ISM Prices Paid and the ISM Manufacturing PMI for April, with the Markit PMI forecast at 58.4 (prev. 59.3) and the ISM Prices Paid expected to tick up slightly from 78.1 to 78.3. Yesterday's round of macro figures from the US missed the mark somewhat, with income rising by only 0.3% in March versus the forecast 0.4%, but numbers have been strong regardless and the US Fed is busy debating how many time to hike rates this year while other central banks are battling with whether or not they can.

EUR/USD Levels to watch

The Euro's tumble against the recovering US Dollar this month has been a fantastically one-sided affair, and the pair is now within spitting distance of the 200-day SMA at 1.2010, an indicator that price hasn't touched since April of last year; as FXStreet's Chief Analyst, Valeria Bednarik noted on the EUR/USD technical outlook, "the pair is still bearish, developing well below the 61.8% retracement of this year´s rally at 1.2160, the level to recover to see the downward pressure easing. In the 4 hours chart, the 20 SMA maintains a strong bearish slope, capping the upside now at 1.2125. Technical indicators in the mentioned chart have managed to bounce from oversold readings, but remain within negative territory, indicating that chances of a steeper recovery are limited. The pair will likely resume its downward move and test the 1.2000 threshold on a break below 1.2054, Friday's low and the immediate support."

Support levels: 1.2100 1.2060 1.2020

Resistance levels: 1.2125 1.2160 1.2200

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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