- The US Dollar retreated modestly on a quiet Monday.
- The EUR/USD rose but remained below the 20-day and 200-day SMA.
- Data due on Tuesday includes Final Service PMIs and Eurozone PPI.
The EUR/USD experienced a modest rise on Monday following its lowest daily close in two months on Friday. The pair remains above the 1.0770 area but failed to gain traction and consolidate above 1.0800.
European Central Bank (ECB) President Christine Lagarde did not provide any new information on Monday. She emphasized the importance of central banks anchoring inflation expectations while relative price changes take place. However, her comments did not generate any significant market reaction.
On Tuesday, the final reading of the Services PMI in the Eurozone will be released. Market expectations do not anticipate any revisions, so significant changes could impact the Euro. Eurostat will also release the Producer Price Index for July, with an annual rate expected at -7.6%, lower than the -3.4% recorded in June.
The US Dollar experienced a modest pullback on Monday, as the session was quiet with US markets closed. On Tuesday, Factory Orders data will be released.
EUR/USD short-term technical outlook
The bias in EUR/USD remains tilted to the downside. The area around 1.0765, which corresponds to the August lows, continues to act as immediate support. On Friday, the pair closed below the 200-day Simple Moving Average (SMA), which confirms a negative sign for the Euro. However, if the pair manages to recover above the 20-day SMA at 1.0880, it could signal a consolidation phase with the potential for a more sustainable recovery.
On the 4-hour chart, the downside risk persists, although losses are limited as long as the pair remains above 1.0760. A test of this support level may occur while staying below 1.0800. A recovery above 1.0830 would indicate a stronger Euro in the near term. Currently, technical indicators do not provide convincing signals, with the MACD still favoring the downside and the Relative Strength Index (RSI) remaining below 50.
View Live Chart for the EUR/USD
