The EUR/USD currency pair has retraced modestly from a recent multi-week peak. This change represents a first step back in this trend’s long-term upward trajectory. On Monday, the two shot back up to 1.1420. They were especially spurred by continued US Dollar weakness, primarily driven by the return of trade tensions. After losing a good amount of upward momentum, analysts have been saying that the downside potential looks to be fairly limited for the euro to the dollar.
During the American trading session, EUR/USD hovered around the 1.1370 mark, maintaining modest intraday gains that reflect a neutral-to-bullish sentiment in the market. The duo has been trending strongly over a flat 20 Simple Moving Average (SMA), which offers support at about 1.1270. This is an important technical indicator and it insists on positive trends for the euro. While we may experience some temporary ups and downs, the big picture trend is still positive.
The bullish sentiment is backed by the technical indicators. The 100 SMA just completed a bullish crossover above the 200 SMA in the 1.0810 area. That’s an encouraging sign for bullish position in the EUR/USD market. Further support is seen at 1.1330, 1.1270, and 1.1240 and resistance at 1.1420, 1.1460, and 1.1505. These levels give traders important reference points for future price action.
The EUR/USD momentum indicator continues to remain flat, basically trading in the 100 line. At the same time, the Relative Strength index (RSI) is pointing up and currently reads near 59. These signs, unfortunately, point to a time when a powerful movement isn’t likely. Still, the combination of factors continues to favor further bullish activity in the near term.
Recent news with US-China trade relations have played a huge role in moving the currency pair. US President Donald Trump just threatened to unleash an “across-the-board 50% tariff” on imports from the EU. This step has increased market uncertainty and put pressure on investor sentiment towards the euro.
One of the most highly anticipated releases among market participants the Minutes from the Federal Open Market Committee May meeting. Don’t miss our in-depth look at this important update, dropping Wednesday. This document may provide insights into future monetary policy adjustments by the Federal Reserve, potentially affecting EUR/USD dynamics.
With a holiday in both the US and Canada on Monday, EUR/USD activity will likely remain subdued until trading resumes in Asia. Such a holiday could help create a period of lower volatility and trading volume, preventing big price swings in either direction near-term.