EUR/USD Recovery: Navigating Key Resistance Amid Mixed Signals

24 giu

EUR/USD Analysis

1. Recent Trend
Recovery Trend: EUR/USD is showing a recovery momentum, approaching 1.0750 after closing the previous week in negative territory.
Improved Risk Sentiment: The improved risk sentiment hampers USD demand, aiding EUR/USD's rise.

2. Technical Analysis
Moving Averages: On the daily chart, EUR/USD is below all its moving averages. The bearish 20 SMA crosses below the 100 and 200 SMAs, all in the 1.0780/90 price zone.
Technical Indicators: The technical indicators are slightly higher, moving away from oversold levels but still far from their midlines.
Short-Term Scenario: The short-term picture shows increasing buying pressure. The EUR/USD pair is above the 20 SMA, while the longer moving averages maintain their bearish slopes above the current level. Technical indicators aim higher around neutral levels but struggle to surpass their midlines.

3. Key Levels
Support:
1.0705
1.0660
1.0615
Resistance:
1.0755
1.0805
1.0845

4. Fundamental Context
USD Pressure: The US Dollar is under mild selling pressure ahead of Wall Street's opening, giving up modest intraday gains. EUR/USD trades around 1.0730, recovering from an intraday low of 1.0681.
Inflation and Political Jitters: Focus is on political concerns and inflation, particularly the US Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's (Fed) preferred inflation gauge.
FOMC Minutes: The macroeconomic calendar will include the minutes of the Federal Open Market Committee (FOMC) meeting, with limited impact on financial markets due to the Fed's recent economic projections.

5. European Economic Data
German IFO: Germany published the June IFO Business Climate Index, which unexpectedly fell to 88.6 from 89.3 in May, missing the estimate of 89.7.
Expert Assessment: FX strategists at Societe Generale note that expectations are down.

6. Future Outlook
Short-Term Scenario: The EUR/USD pair needs to surpass 1.0760 to confirm positive momentum and extend gains towards the 1.0810 price zone.
Market Considerations: Despite lowered expectations, the Euro is advancing even with tepid local data and might face resistance in reaching higher levels like 1.08.

Conclusion
The technical and fundamental outlook for EUR/USD suggests that despite a recovery momentum, the pair remains under pressure with significant resistance around 1.0760 and beyond. Economic dynamics and market expectations will continue to play a crucial role in the pair's performance, with particular attention to US economic data and Fed decisions.