EURUSD reluctant to push lower ahead of elections and infllation

Euro-dollar held close to monthly lows in the middle of June as traders continued to expect more cuts from the ECB than the Fed this year and it remained clear that overall economic performance in the eurozone is worse than the USA. However, it’s unlikely that either the EU or the USA will face a recession this year or a significant divergence in policy will open up between the Fed and the ECB before possibly Q1 2025, so fundamentals don’t strongly favour either currency at the moment.

Since $1.067 has been tested unsuccessfully three times so far this month, the price probably won’t break clearly below there without a significant fundamental driver; most of the time, second and subsequent tests of a technical area are less likely to break through. The main reference on this chart remains the 38.2% weekly Fibonacci retracement around $1.072.

Both on the daily chart (if zoomed out somewhat) and the weekly, the current trend looks more like sideways than downward, so the value area between the 20, 50 and 100 SMAs might cap any gains in the next few sessions. Traders are concentrating on the French elections, but German and eurozone-wide preliminary inflation on 1 and 2 July respectively are important releases.

This is my personal opinion which does not represent the opinion of Exness. This is not a recommendation to trade.