– EURUSD has started to edge higher above 1.0700.
– Improving market mood seems to be helping the euro find demand.
– The near-term technical picture suggests that sellers remain on the sidelines.
EUR/USD has gained traction in the early European morning on Monday after having closed the previous week virtually unchanged slightly above 1.0700. The improving market mood seems to be helping the pair edge higher at the start of the week and the near-term technical picture shows that the bullish bias stays intact.
Although many European markets are closed due to the Whit Monday holiday on Monday, risk flows seem to be taking control of markets. Over the weekend, news of Chinese authorities decided that normal will resume in Beijing from Monday and traffic bans will be lifted in most areas of the capital city. Additionally, US Commerce Secretary Gina Raimondo reaffirmed on Sunday that US President Joe Biden’s administration is looking to ease tariffs on Chinese goods to battle inflation, further boosting the market mood.
Reflecting the positive sentiment, US stock index futures are up between 0.7% and 1% while the US Dollar Index stays in negative territory below 102.00.
There won’t be any high-impact data releases in the remainder of the day and the dollar is likely to stay on the back foot in case Wall Street’s main indexes rise decisively after the opening bell.
EURUSD Technical Analysis
The Relative Strength Index (RSI) indicator on the four-hour chart holds comfortably above 50 and EUR/USD stays afloat above the 20-period and 50-period SMAs on the same chart, confirming the short-term bullish bias.
On the upside, 1.0760 (static level) aligns as first hurdle ahead of 1.0780, the end-point of the uptrend that formed in the second half of May. With a four-hour close above the latter resistance, the pair could target 1.0800 (psychological level).
1.0720 (50-period SMA) aligns as first support before 1.0700 (psychological level, static level). Fibonacci 23.6% retracement forms significant support at 1.0680 and sellers are likely to show interest in case the price drops below that level.
Source: Eren Sengezer – FXStreet