EUR/USD Has Turned Bearish; A Confirmation Will Come With A Break Below 1.1170

• Coronavirus cases keep rising in the US, overshadowing encouraging macro data.
• EU inflation came in at 0.1% YoY in May, in line with the market’s expectations.
• EUR/USD has turned bearish, a confirmation will come with a break below 1.1170.

The EUR/USD pair is down for a second consecutive day, trading around 1.1230 as the day comes to an end after posting a daily low of 1.1206. The market’s positive sentiment faded as the day went by, amid a continued increase in coronavirus cases in some US states that tempered positive macroeconomic data. The shared currency was among the weakest, as the annual CPI in the Union came in at 0.1%, as expected, although the lowest reading in years. Construction Output in the EU fell by 14.6% in April, after shrinking by 15.7% in the previous month.  

The US, on the other hand, has just published Building Permits, which rose by 14.4% in May after falling by 21.4% in the previous month. Housing Starts in the same period rose by 4.3% up from -26.4% in the previous month. This Thursday, the macroeconomic calendar will remain light, as the most relevant report to be out is the weekly Initial Jobless Claims for the week ended June 12, foreseen at 1.3 million.

EUR/USD short-term technical outlook

The EUR/USD pair broke below the 23.6% retracement of its latest daily advance, but so far holds above the 38.2% retracement, this last at 1.1170. The 4-hour chart shows that a bullish 100 SMA provided intraday support, currently at 1.1205, while a bearish 20 SMA converges with the 23.6% Fibonacci level. Technical indicators, in the meantime, hold within negative levels, the Momentum aiming marginally higher, and the RSI flat at around 38.

Support levels: 1.1205 1.1170 1.1120

Resistance levels: 1.1270 1.1310 1.1350  

View Live Chart for the EUR/USD