Due to a holiday in the United States, volumes were low and majors were trading in tight ranges.
Sentix Investor Confidence in the EU increased to 29.8 in July from 28.1 the previous month.
In the short term, the EUR/USD is neutral, with the risk tilted to the negative.
The EUR/USD pair closed Monday at 1.1860, unchanged from the previous day’s closing. The dollar rose at the start of the week, but gains were limited and swiftly reversed. However, the ensuing drop was also restrained due to lower volumes in the United States due to the holidays. The market was largely negative, as the development of new coronavirus types cast doubt on a return to normalcy. Concerns are few so far, but they do weigh on public opinion.
In the meantime, macroeconomic data continues to show progress. The final editions of Markit’s June Services PMIs for the EU have been released. The German index was lowered down to 57.5, while the overall Union index was stronger than expected, hitting 58.3. The EU released the Sentix Investor Confidence Index for July, which rose from 28.1 to 29.8, but fell short of the predicted 30.
On Tuesday, Germany will release May Factory Orders, which are predicted to be up 5% MoM, as well as the July ZEW poll, which is expected to show that the country’s Economic Sentiment has deteriorated. The EU will announce May Retail Sales, which are expected to increase by 4.1 percent on a month-over-month basis, while the US will reveal the official ISM Services PMI, which was previously at 64.
EUR/USD Technical Outlook in the Short Term
The EUR/USD pair has been maintaining in a narrow range throughout the day, but the risk remains tilted to the downside as long as it remains below the 1.1920 Fibonacci barrier level. The pair is holding a few points above a mildly bearish 20 SMA on the 4-hour chart, while the longer ones continue to trend south far above the present level, indicating sustained selling interest. Without any evident directional strength, technical indicators are stalled around their midpoints. If the pair falls below 1.1840, the immediate support, the bearish case will get stronger.
Levels of support: 1.1840, 1.1795, and 1.1750
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