EUR/USD Price Forecast: Ascending channel favors bulls ahead of the key central bank event risk

FXStreet
Updated
Mitrade
coverImg
Source: DepositPhotos

  • EUR/USD kicks off the new week on a softer note amid a modest USD uptick.

  • The lack of follow-through selling warrants some caution for bearish traders.

  • Investors also seem reluctant ahead of the key FOMC decision on Wednesday.

The EUR/USD pair trades with a mild negative bias below mid-1.1500s through the Asian session on Monday amid a modest US Dollar (USD) uptick, though it lacks bearish conviction. Spot prices remain close to the highest level since October 2021, around the 1.1630 area touched last week as traders now look to the crucial FOMC policy decision on Wednesday before placing fresh directional bets.

Heading into the key central bank event risk, expectations that the Federal Reserve (Fed) will resume its rate-cutting cycle in September might hold back the USD bulls from placing aggressive bets. Moreover, the European Central Bank's (ECB) hawkish signal, that the end of the rate-cutting cycle is nearing, should act as a tailwind for the shared currency and continue supporting the EUR/USD pair.

From a technical perspective, the recent move-up witnessed over the past month or so, along an ascending channel, points to a well-established short-term uptrend and favors bullish traders. Moreover, oscillators on the daily chart are holding in positive territory and suggest that the path of the least hurdle for the EUR/USD pair is to the upside. Hence, any corrective slide could be seen as a buying opportunity.

In the meantime, the 1.1500 psychological mark could protect the immediate downside ahead of the 1.1450-1.1445 horizontal resistance breakpoint. This is closely followed by the trend-channel support, around the 1.1435-1.1430 area, which should act as a pivotal point. A convincing break below the latter could drag the EUR/USD pair further below the 1.1400 mark, towards the 1.1370-1.1365 support zone.

On the flip side, the 1.1570 area, followed by the 1.1600 round figure and the 1.1630 region, or the multi-year peak touched last Thursday, now seems to act as immediate hurdles. Some follow-through buying beyond the 1.1655-1.1660 zone, or the top end of the short-term ascending channel, will be seen as a fresh trigger for bullish traders and allow the EUR/USD pair to aim towards conquering the 1.1700 mark.

EUR/USD daily chart

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

goTop
quote
Do you find this article useful?
Related Articles
placeholder
EUR/USD rebounds from 1.1600 despite market caution ahead of US PPI dataEUR/USD halts its five-day losing streak, trading around 1.1610 during the Asian hours on Wednesday. The pair appreciates despite the stable US Dollar (USD), driven by traders’ caution ahead of the upcoming US Producer Price Index (PPI) later on Wednesday.
Author  FXStreet
7 Month 16 Day Wed
EUR/USD halts its five-day losing streak, trading around 1.1610 during the Asian hours on Wednesday. The pair appreciates despite the stable US Dollar (USD), driven by traders’ caution ahead of the upcoming US Producer Price Index (PPI) later on Wednesday.
placeholder
EUR/USD rises to near 1.1700 due to Trump’s tariff threats on European UnionEUR/USD halts its three-day losing streak, trading around 1.1700 during the Asian hours on Monday. The pair gains ground as the US Dollar (USD) loses ground due to escalating global trade tensions.
Author  FXStreet
7 Month 14 Day Mon
EUR/USD halts its three-day losing streak, trading around 1.1700 during the Asian hours on Monday. The pair gains ground as the US Dollar (USD) loses ground due to escalating global trade tensions.
placeholder
EUR/USD Price Forecast: Bullish outlook remains in play above 1.1750The EUR/USD pair edges lower to around 1.1765 during the early European session on Monday. The renewed concerns about a global trade war and tariff uncertainty weigh on the shared currency.
Author  FXStreet
7 Month 07 Day Mon
The EUR/USD pair edges lower to around 1.1765 during the early European session on Monday. The renewed concerns about a global trade war and tariff uncertainty weigh on the shared currency.
placeholder
EUR/USD wobbles around 1.1760 amid holiday in US on account of Independence DayThe EUR/USD pair trades in a tight range around 1.1760 during the Asian session on Friday. The major currency pair exhibits a lackluster performance amid a holiday in the United States (US) markets on account of Independence Day.
Author  FXStreet
7 Month 04 Day Fri
The EUR/USD pair trades in a tight range around 1.1760 during the Asian session on Friday. The major currency pair exhibits a lackluster performance amid a holiday in the United States (US) markets on account of Independence Day.
placeholder
EUR/JPY Price Forecast: Trades below 169.00 after pulling back from eleven-month highsEUR/JPY halts its three-day winning streak, trading around 168.80 during the Asian hours on Tuesday. According to the technical analysis of the daily chart, the currency cross attempts to break above the ascending channel pattern, strengthening the bullish bias.
Author  FXStreet
6 Month 24 Day Tue
EUR/JPY halts its three-day winning streak, trading around 168.80 during the Asian hours on Tuesday. According to the technical analysis of the daily chart, the currency cross attempts to break above the ascending channel pattern, strengthening the bullish bias.
Real-time Quote