The EUR/USD pair faced pressure on Monday as the Dollar strengthened, pushing the pair towards three-day lows near the 1.0800 region. The Dollar started the week on a positive note, reaching multi-day tops near 104.80 against other currencies.
Investors are closely watching for Germany’s flash CPI release, as well as anticipating rate cuts from both the Federal Reserve (Fed) and the European Central Bank (ECB) after the summer break. The Fed is expected to maintain rates in July but may hint at future easing in September. Vice President Luis de Guindos has suggested an ECB rate cut in September as well.
The policy divergence between the Fed and ECB, along with economic recovery differences between the US and Eurozone, could lead to further weakness in the Euro in the medium-term.
Upcoming releases of Q2 GDP Growth Rate in Germany and the euro bloc, as well as the advanced Inflation Rate in Germany on July 30, will be closely monitored by market participants.
EUR/USD Short-Term Technical Outlook
The EUR/USD pair faces downside pressure towards the weekly low of 1.0802, with key support at the 100-day SMA at 1.0796. Resistance is seen at the July high of 1.0948 and further milestones at 1.0981 and 1.1000.
In the big picture, a negative bias may return if the pair stays below the crucial 200-day SMA at 1.0820. The four-hour chart shows a downward bias, with resistance at 1.0875 and support at 1.0802 and 1.0709.
Overall, the EUR/USD pair is facing pressure from Dollar strength and potential rate cuts, with key support and resistance levels to watch in the short-term.