EURUSD outlook: Recovery faces tough work at the upside to generate bullish signal
(Slobodan Drvenica – Windsor Brokers)
The Euro is holding in a tight range on Monday, following initial bullish signal on double downside rejection last Thu/Fri, on expected headwinds at key 1.0360/40 support zone.
Mixed daily studies (14-d momentum is attempting to break into positive zone and stochastic is heading north, RSI and MA’s are bearishly aligned) look for clearer signal.
Initial optimism that the action could bounce, exists but needs verification on lift and close above daily Tenkan-sen (1.0490) that is seen as minimum requirement.
In such scenario, recovery would accelerate towards strong barriers at 1.0572 (daily Kijun-sen), 1.0602 (daily cloud base) and 1.0614 (Jun 27 recovery top), but unlikely to easily break higher that would keep short-term action within the range and keep the downside vulnerable.
Expect stronger direction signals on break of either pivot at 1.0572 and 1.0340.
Fundamentals do not work in favor of Euro, as the ECB will likely stick to its initial decision for the first rate hike by 25 basis points, while the Fed is increasingly hawkish and markets already talk about more aggressive step on 75 basis points hike in July policy meeting that would further inflate the dollar and keep the single currency in defensive.
Res: 1.0456; 1.0490; 1.0519; 1.0572.
Sup: 1.0380; 1.0358; 1.0349; 1.0340.
EURUSD: Calm market due to US Independence day
(Vasilis Tsaprounis – TopFX)
In a calm tone the pair trades as the markets do not expect any important economic data from the Eurozone and the markets on the opposite side of the Atlantic are closed due to the Independence Day of the United States.
Last week’s close came as no surprise with eurozone inflation showing a modest increase as expected.
Once again the pair reacted after a strong dip near the 1,0365 levels. It is the third attempt since May 8 that the 1,0350 level has proved particularly strong.
The pair although showing signs of reaction to every dip remains vulnerable and it may be only a matter of time before this level breaks downwards too.
The idea to buy the pair on a dip as we mentioned the last days it turned out to be quite successful again and in such an environment may be and for today we consider something similar.
In general, due to the holiday in the United States, trading is expected to be limited range trading and the market to be relatively shallow.