Bullish view
Bearish view
The EUR/USD pair rose to an important resistance level as focus now shifts to this week’s European Central Bank (ECB) decision. It rose to a high of 1.0912, its highest point in June and the neckline of the inverse head and shoulders pattern.
ECB decision and US retail sales dataThe EUR/USD pair continued its strong rally after the weak US economic numbers raised the optimism that the Federal Reserve will start cutting interest rates in September.Earlier this month, data showed that the unemployment rate rose to 4.1% in June after bottoming at 3.5% in July last year. It has been in a slow increase in the past few months even as the economy has added thousands of jobs.Additional data by the Institute of Supply Management (ISM) showed that the manufacturing and non-manufacturing PMIs dropped below 50 in June. And last week, inflation numbers revealed that the headline and core consumer inflation dropped to 3.0% and 3.2% in June.Therefore, these numbers have led to a sharp decline in the US dollar index, which has plummeted from over $105.5 in June to almost $104.The next key catalyst for the EUR/USD will be the upcoming statement by Fed officials like Mary Daly and Jerome Powell. In his testimony to Congress last week, Powell noted that the bank welcomed these inflation numbers but still wanted more evidence of the trend. The US will publish the important retail sales data on Tuesday.The top EUR/USD news will come out on Thursday when the European Central Bank delivers its decision. This will be a crucial meeting because the ECB will provide hints about whether it will start to cut interest rates soon. Eurostat will publish the final June inflation data on Wednesday.
EUR/USD technical analysisThe EUR/USD pair bottomed at 1.0666 earlier this month and has now risen to 1.0912. On the daily chart, the pair has moved above the 50-day and 25-day moving averages.It sits at an important resistance point at 1.0912, the neckline of the inverse head and shoulders pattern that has been forming. The pair has also moved above the ascending trendline that connects the lowest point since October last year.It has jumped above the first support of the Woodie pivot point while the Relative Strength Index (RSI) has pointed upward. Therefore, the pair will likely continue rising as buyers target the key resistance at 1.0950.More By This Author:Lucid Group Stock Analysis: How High Can LCID Reach? BTC/USD Forex Signal: Bitcoin Is On the Cusp Of A Bearish BreakdownEUR/USD Forex Signal: Analysis Ahead Of US Inflation Data
