EUR/USD struggles for a firm intraday direction, consolidates in a range above 1.0900 mark


  • EUR/USD holds steady above the 1.0900 mark, though struggles to attract any buyers.
  • Bets for more Fed rate hikes revive the USD demand and act as a headwind for the pair.
  • Worries about a global economic downturn contribute to capping gains for the major.

The EUR/USD pair struggles to gain any meaningful traction on the first day of the new week and oscillates in a narrow trading band through the Asian session. Spot prices, however, manage to defend the 1.0900 mark, though remain below the 200-hour Simple Moving Average (SMA) resistance, warranting caution before positioning for an extension of Friday's goodish rebound from a two-week low.

The shared currency continues to draw some support from rising bets for another 25 bps lift-off by the European Central Bank (ECB) in July and turns out to be a key factor lending some support to the EUR/USD pair. The preliminary report published by Eurostat showed that the annual Euro Zone Harmonised Index of Consumer Prices (HICP) decelerated from 6.1% to 5.5% in June. That said, the Core HICP rose by 0.3% MoM and edged higher to the 5.4% YoY rate, reaffirming expectations for more rate hikes by the ECB in the coming months.

That said, the emergence of some US Dollar (USD) buying, supported by the Federal Reserve's (Fed) hawkish stance, is holding back bulls from placing aggressive bets around the EUR/USD pair and acting as a headwind. It is worth recalling Fed Chair Jerome Powell reiterated last week that borrowing costs may still need to rise as much as 50 bps by the end of this year. Moreover, the current market pricing indicates a nearly 85% chance of a 25 bps lift-off at the July FOMC meeting and the bets were reaffirmed by Friday's mixed US PCE Price Index.

In fact, the Bureau of Economic Analysis reported that the annual PCE Price Index decelerated to 3.8% in May from 4.3% in the previous month. Additional details showed the Core PCE Price Index, excluding the volatile food and energy components, ticked down to 4.6% during the reported month from 4.7% in April. The gauge, however, remains well above the Fed's 2% target and supports prospects for further policy tightening. This remains supportive of elevated US Treasury bond yields, which lend support to the USD and cap the EUR/USD pair.

Apart from this, worries about economic headwinds stemming from rapidly rising borrowing costs warrant some caution for bullish traders ahead of this week's important macro releases, starting with the US ISM Manufacturing PMI on Monday. The focus, meanwhile, will remain glued to the FOMC meeting minutes on Wednesday, which will be followed by the closely-watched US monthly employment details - popularly known as NFP. This will play a key role in influencing the USD and provide a fresh directional impetus to the EUR/USD pair.

Technical levels to watch

EUR/USD

Overview
Today last price 1.0916
Today Daily Change 0.0006
Today Daily Change % 0.05
Today daily open 1.091
 
Trends
Daily SMA20 1.0857
Daily SMA50 1.0871
Daily SMA100 1.0819
Daily SMA200 1.0591
 
Levels
Previous Daily High 1.0932
Previous Daily Low 1.0835
Previous Weekly High 1.0977
Previous Weekly Low 1.0835
Previous Monthly High 1.1012
Previous Monthly Low 1.0662
Daily Fibonacci 38.2% 1.0895
Daily Fibonacci 61.8% 1.0872
Daily Pivot Point S1 1.0853
Daily Pivot Point S2 1.0796
Daily Pivot Point S3 1.0756
Daily Pivot Point R1 1.095
Daily Pivot Point R2 1.0989
Daily Pivot Point R3 1.1046

 

 

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD stays below 1.0700 after upbeat US PMI data

EUR/USD stays below 1.0700 after upbeat US PMI data

EUR/USD stays on the back foot and trades in negative territory below 1.0700 as the US Dollar benefits from upbeat data in the American session. S&P Global reported that the economic activity in the US private sector continued to expand at a robust pace in June.

EUR/USD News

GBP/USD drops to fresh multi-week low below 1.2650

GBP/USD drops to fresh multi-week low below 1.2650

GBP/USD remains under bearish pressure and trades at its lowest level since mid-May below 1.2650. The stronger-than-forecast Manufacturing and Services PMI data from the US helps the USD hold its ground and causes the pair to stretch lower.

GBP/USD News

Gold drops below $2,340 as US yields rebound

Gold drops below $2,340 as US yields rebound

Gold loses its traction and trades deep in the red below $2,340 in the second half of the day on Friday. The benchmark 10-year US Treasury bond yield pushes higher following the upbeat PMI data from the US, weighing on XAU/USD.

Gold News

Bitcoin retraces to crucial support

Bitcoin retraces to crucial support

Bitcoin price encounters resistance at weekly highs before retracing to seek support at a crucial level, while Ethereum and Ripple align closely with Bitcoin's movements, gearing up to surpass resistance barriers and embark on upward rallies.

Read more

Week ahead – US PCE inflation the highlight of a relatively light agenda

Week ahead – US PCE inflation the highlight of a relatively light agenda

Core PCE inflation to test bets of two Fed rate cuts in 2024. Yen awaits BoJ Summary of Opinions, Tokyo CPI. Canadian CPI data also enters the spotlight.

Read more

Forex MAJORS

Cryptocurrencies

Signatures