A sense of calm has struck the FX space on the final trading day of the week, leaving the main currency pair – EUR/USD largely flat-lined just ahead of 1.14 handle, as investors brace for the main market moving for the day, the US CPI data for the month of June.
EUR/USD capped below 5-DMA at 1.1418
The EUR bulls are seen struggling hard to defend 1.14 handle amid a lack of fresh fundamental drivers or direction, as the EUR/USD pair appears to be out of sync with the USD dynamics, with focus now solely on softening inflation in both continents.
The Fed Chair Yellen resorted to a cautious stance on further rate rises, in the wake of concerns that inflation could undershoot the Fed’s objective. Meanwhile, the ECB governing council member Rimsevics also expressed his concerns over weakening inflation a day before.
In the meantime, the major will take cues from the sentiment on the European markets and Eurozone trade balance data until the US economic releases that will wind up this week.
EUR/USD Technical Levels
According to Haresh Menghani, Analyst at FXStreet, “A clear break through 1.1430-40 should continue lifting the pair towards 1.1465 intermediate horizontal resistance ahead of 1.1480 level (61.8% Fibonacci expansion level of 1.1172-1.14456 up-move and subsequent retracement) and the key 1.1500 psychological mark. On the flip side, a decisive break below 1.1375-70 area could trigger a corrective slide initially towards 1.1340-35 region ahead of the 1.1300 round figure mark. Any subsequent weakness now seems to find fresh buying interest near 1.1275 area, which if broken could pave way for extension of the pair’s near-term corrective slide.”