Softer US data has helped EURUSD head higher

Updated

The US economic surprise index suggests that incoming data will likely remain soft due to restrictive monetary conditions and a return to disinflation. Despite an expected rate cut from the ECB, softer US data has caused EUR/USD to rise.

The pair has been moving within a downward sloping channel since mid-May, with support at 1.0800 and resistance at 1.0942/1.0950.

Note

EUR/USD edged up slightly during Tuesday's Asian session and is currently trading around 1.0770. Both fundamental and technical outlooks call for caution before looking at the previous day's mild recovery from lows around 1.0730.

Note

EUR/USD needs to hold above 1.0800 to maintain the uptrend, if it falls below this level first support will appear around 1.0740, on the way towards 1.0660. A deeper decline would push the pair towards the year's low at 1.0600 if the USD regains its footing.

Note

EURUSD is extending its upward momentum above 1.12000 during the session, approaching its peak since July 2023 - 1.1271. This is also the next goal. The support level is located around 1.1184.

Note

There is only one deal to note today. That is the EUR/USD options contract at 1.1100. The price action since last week shows that while reaching 1.1100 may take time, if it happens, there will be many factors that will help stabilize the rate at this level. If the USD does not fluctuate much, then expiring contracts will not have a significant influence on market movements in the next trading session.

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