EUR/USD: New month, time for new gains? Three factors point higher

EUR/USD is hovering above 1.22. The pair ended May with substantial gains and after a minor correction, there is room for rises as eurozone reopening, potential US cooldown and bullish charts all point higher, FXStreet’s Analyst Yohay Elam reports.

Several factors make the bullish case for the EUR/USD pair

“As June begins, Italy is taking another step in its reopening. Germany's the continent's locomotive, is also mulling the removal of a controversial lockdown law, allowing more freedom as coronavirus cases drop sharply. [...] Roughly 40% of the old continent's population received one vaccine jab. The campaign is bearing fruit.” 

“Statistics for May could show some signs of a cooldown in price pressures – at least a retreat from the highs. The ISM Manufacturing PMI for May is forecast to include an elevated Prices Paid component. After this inflation gauge hit the highest on record in April, there is room to fall. Investors will also watch the headline Manufacturing PMI and the employment component, which is a leading indicator toward Friday's Nonfarm Payrolls.” 

“Federal Reserve Governors Lael Brainard and Randal Quarles are slated to speak later on, and if they reiterate the bank's dovish message, the dollar has room to fall.”

“Euro/dollar has recaptured the 50 Simple Moving Average on the four-hour chart in its latest upswing, a bullish sign joining positive momentum.” 

“Some resistance awaits at 1.2245, the former triple top that capped EUR/USD in May. It is followed by the peak of 1.2266, and then by 1.23.”

“The currency pair has some support at 1.22, which capped it late last week. Further down, 1.2180, 1.2160 and 1.2130 all played roles in recent weeks and serve as additional cushions.”