EUR/USD Forecast: Bulls Want More

• European reopenings underpin the shared currency while civil unrest weighs on the greenback.
• The US ISM Non-Manufacturing PMI is foreseen at 44 in May from 41.8 in April.
• EUR/USD bullish despite some divergences surging in intraday charts.

Economic reopenings in Europe and civil unrest in the US-dominated the headlines and the FX board. The greenback remained under strong selling pressure against its high-yielding rivals but managed to appreciate against those considered safe havens. The EUR/USD pair reached 1.1196, its highest since mid-March, as the number of new coronavirus cases in the Union has been decreasing drastically despite economies have slowly easing restrictive measures. In the US, on the other hand, protests have escalated across all states, and US President Trump threatened to use the military to end riots. Risk-on prevailed through the Asian and European sessions, but faded during US trading hours, with US indexes easing from intraday highs and ending the day with uneven gains.

There was little in the data front, as the EU didn’t release macroeconomic figures, while the US just published the ISM-NY Business Conditions Index, which came in at 19.5 in May from 4.3 in April. This Wednesday Markit will publish the final versions of the Services PMI for May, while the US will publish the official ISM Non-Manufacturing PMI, foreseen at 44 from 41.8. Additionally, the US will unveil the ADP survey, expected to show that the US private sector lost 9 million job positions in May, after losing over 20 million in the previous month.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair holds on to gains around 1.1170 by the end of the American session, up for a sixth consecutive day. A bullish stance prevails as the pair is also posting higher highs on a daily basis. The 4-hour chart shows that the 20 SMA continues to advance below the current level, now around 1.1115. The RSI indicator consolidates around 70, while the Momentum indicator eases within positive levels, posting lower highs as the price posted higher highs. Nevertheless, it still develops within positive levels. The pair could correct lower, but bears will have little chances as long as it holds above 1.1065.
Support Levels: 1.1150 1.1110 1.1065
Resistance Levels: 1.1195 1.1240 1.1285