In the latest trading session on Monday, the EUR/USD currency pair rose. This upward movement continues a 16-month trend of climbing value. It’s a big breakthrough for traders, as the pair has now printed its first three lower highs in a row. Balancing all this bullish momentum is an increasing sense of caution among market participants. The rising geopolitical tensions in the Middle East add to the general risk-averse environment.
The EUR/USD pair continued climbing into the major resistance area of 1.1600 during the first hour of American trading hours. Challenge intraday buyers have come in, largely in response to the consolidating bullish 20 Simple Moving Average (SMA). We have seen this important level provide dynamic support near the 1.1530 area. This level is very important to avoid further negative sentiment since this would show continued weakness and a lack of stability in the currency pair’s performance.
Support levels for the EUR/USD cross are clearly defined at 1.1530, 1.1490 and 1.1440. On the other hand, 1.1600, 1.1640 and 1.1685 stand as resistance lines. Further, the current technical layout of these levels suggests a very narrow range for the pair. Otherwise it’s bound to remain up or down in that range until major market catalysts materialize.
That better-than-expected eco data from the US has not helped prop the Greenback amid an impressive wave of selling during the European trading day. NY Empire State Manufacturing Index for June fell to -16. This dramatic drop short of forecasts for a bounce back to -5.5 and was a notable reversal from the -9.2 reading in May. It’s no wonder this disappointing data had traders feeling down. As a consequence, the US dollar resumed its weakening trend in a context of high sanctity.
Throughout American trading hours, the Greenback kept its soft tone, despite ongoing concerns about US economic stability and growth prospects weighing on the currency. Weak manufacturing data and growing geopolitical tensions have created a nervous environment for many traders. Consequently, they are extremely concerned regarding potential future shifts in the currency markets.
Here’s what market participants are looking for as the economic landscape continues to shift. Instead, the market junkies can’t wait for the release of Germany’s June ZEW Survey on Economic Sentiment. Analysts expect this report to provide the most comprehensive picture yet of Europe’s economic prospects. This data might play a big role in determining the direction of the EUR/USD pair over the next few days.
The 100 and 200 SMAs have a neutral-to-bullish slope under the active 20 SMA. Positive recovery This paints a pretty bullish picture in the short term, it’s important to be cautious due to the overall economic backdrop. With all of these tools, traders need to be ready to react to changes in these technical indicators. Such shifts can indicate significant potential reversals or continuations of existing trends.
It is important that traders keep abreast of changes in this developing situation. Being aware of important technical levels and macroeconomic indicators are key to getting a read on what is driving currency movements. That, coupled with the ever present interaction between geopolitical events and economic data, will probably continue to determine market sentiment in the short run.