During Monday's trading session, EUR/USD remained positive by trading above the 1.0750 level. The current market mood along with the central bank meetings and economic data releases, have made it difficult for the USD to find demand.
All of these factors have made it difficult for the USD to gain any ground against the Euro. That's why when we look at a pair like the EUR/USD, it becomes clear that the market environment is favoring more upside.
EUR/USD: RSI Hints Toward Bullish Momentum
If we look at the EUR/USD 4-hr chart, the RSI indicator is also pointing towards the bullish momentum. For now, the RSI is trading above the 60 level which is a bullish sign. In addition, the 20 SMA on the 4-hr chart is also trading above the 100 SMA which is yet another bullish sign.
Looking above, the next important resistance levels for EUR/USD are 1.0800, 1.0840, and 1.0860. The first is a round figure while the 2nd one coincides with the 200 SMA. Similarly, the 1.0860 level coincides with the 50% fib retracement.
If the EUR/USD pair breaks the 1.0750 level, it would lead us to slide toward the 1.0720 support followed by the 1.0700 support.
Overall, EUR/USD has managed to start the new week with a minor upside and was last seen inching toward the 1.0750 level. In addition, the technical outlook of EUR/USD suggests that more gains are highly likely in the near term.
Furthermore, the current market mood is risk positive which has made it difficult for the USD to find ample demand among the investors.
Looking ahead, we have the CPI release due in a few days while the forecast for CPI suggests that it will reach 4.2 (yearly basis). Earlier, the CPI reading for April was 4.9% which tells us that the market is expecting inflation to cool down.
But the biggest event that will change the direction of EUR/USD is the Fed meeting and their policy decision.