The EUR/USD currency pair is exhibiting sideways movement near the 1.1350 level during the European trading session on Monday. Recent technical indicators suggest that there is a noticeable lack of buyer engagement, and the pair’s fluctuations may remain muted as key economic data releases are expected later this week. After experiencing slight losses in the previous week, the pair’s current position reflects a struggle to establish a clear direction, although there is no significant indication of bearish momentum building up.
Last week, the US Dollar demonstrated resilience against its peers, contributing to the downward pressure on the EUR/USD as market sentiment shifted in favor of a potential easing of tensions in the US-China trade relations. As of Monday, market participants are adopting a cautious stance due to the absence of fresh developments in trade discussions, yet support for the pair remains intact. Notably, remarks from a spokesperson for the Chinese Foreign Ministry clarified that there are currently no trade negotiations taking place with the US. Simultaneously, European Central Bank policymaker Francois Villeroy de Galhau mentioned that there is still room for rate cuts within the Eurozone.
In terms of upcoming economic events, the US calendar appears relatively quiet, lacking significant data releases. However, key reports regarding Gross Domestic Product from both the Eurozone and the US are expected later in the week, alongside the US employment data set for release on Friday. This uncertainty may lead to a reluctance among investors to commit to substantial trades ahead of these releases. Nevertheless, should markets receive positive indicators about a potential US-China trade agreement, the USD could gain additional strength.
From a technical perspective, the Relative Strength Index (RSI) on the 4-hour chart indicates a flat position just below the 50 level, highlighting the current indecisiveness of the pair. Key support lies at 1.1270, where the 100-period Simple Moving Average and the Fibonacci 38.2% retracement intersect, followed by further support at 1.1180. On the upside, resistance levels are identified at 1.1390-1.1400, 1.1450, and the significant round number at 1.1500.
