EURUSD rose marginally in the European trading session on Monday, trading at 1.0710 after gaining O.08 percent. The currency pair is attempting to recover from Friday’s decline that saw it reach a six-week low. June has proven to be a challenging month for the euro, with its losses against the US dollar standing at 1.27 percent as of this writing.
The decline by the Eurozone’s currency is likely to continue in the near-term, as recent European Parliamentary Election results continue to create jitters about the economic block’s future policy trajectory. The European Central Bank (ECB) has also found itself at crossroads, having to balance between the need to stimulate the Eurozone economy and tackling inflation amid rising labour costs. This will get a broader perspective on Tuesday when the Eurozone Consumer Price Index (CPI) figures for May are released.
In the intervening period, EURUSD traders are likely to focus on speeches by two FOMC members, Philadelphia’s Federal Reserve Bank President Patrick Harker and New York Fed President John Williams. Many are hoping that the two will shed light on the likely policy direction, especially in view of the signs of declining US inflation rate. That said, the market does not expect rate cuts at least until September at the earliest. That said, Minneapolis Fed President Neel Kashkari stated over the weekend that the first rate cut could delay longer until December. Therefore, similar positions by Williams and Harker could strengthen the greenback further.
Technical analysis
The EURUSD is currently tilted in favour of the buyers, and the pivot is likely to be at 1.0716. The upside will likely encounter the first resistance at 1.0727, with extended control by the bulls likely to lead to further gains to test 1.0736. On the other hand, a move below 1.0716 will signal control by the sellers, and the first support will likely be at 1.0704. A break under that mark will not only invalidate the upside narrative, but could also see the pair test 1.0695 in extension.