EUR/USD is trading slightly lower near 1.1428 as the US Dollar recovers from a weak weekly close. The pair sits below its 20-day EMA, keeping upside constrained, while traders wait on Wednesday's FOMC Minutes and weigh a softer Eurozone inflation print.
EUR/USD is drifting lower in early European trading on Monday, pinned near 1.1428 as the US Dollar claws back ground after a negative weekly close. Modest selling pressure has emerged even as the euro holds its own against several other majors.
Dollar firms after a soft payrolls print
The US Dollar Index, which measures the greenback against six major peers, is up 0.1% near 101.00 in late Asian dealings. That recovery follows a stretch of weakness set off by June's Nonfarm Payrolls report, which pointed to moderate labor demand and prompted traders to reassess Federal Reserve rate-hike expectations.
Investors now turn to the FOMC Minutes from the June meeting, due Wednesday, for further clarity on the US interest rate outlook and any nuances in policymakers' discussions.
Softer Eurozone inflation cools ECB bets
Even as concerns about further European Central Bank tightening this year recede, the euro continues to outperform several other majors. That resilience comes despite a cooler-than-expected inflation reading.
Eurozone flash core HICP, which strips out food, energy, alcohol, and tobacco, came in at 2.4% in June, undershooting both the consensus and the prior 2.6% reading. Expectations for additional ECB rate hikes are likely to soften after that inflation print decelerated more than anticipated.
Technical picture keeps upside capped
EUR/USD is hovering near 1.1430 with a mildly bearish short-term stance, trading below the 20-day EMA at 1.1462. Its position under that dynamic level suggests upward moves remain constrained for now, while the RSI near 42 signals soft but stabilizing downside momentum rather than clearly oversold conditions.
A daily close above the 20-day EMA would be needed to ease the bearish pressure and open the way toward the 1.1500 region. On the downside, the June 24 low at 1.1325 marks the primary support, with a break below bringing 1.1300 into view.
Source: TradingPedia
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