EUR/USD Is Neutral In The Near-Term, With The Risk Tilted To The Downside

EUR/USD Current Price: 1.1857

• Germany and the US will publish the final versions of their June inflation on Tuesday.
• The spread of the coronavirus Delta variant weighs on investors´ mood.
• EUR/USD is neutral in the near-term, with the risk tilted to the downside.

The EUR/USD pair traded in a limited range this Monday, driven by the market’s sentiment in the absence of fundamental triggers. The mood soured with London’s opening but improved during the American session. The pair bottomed at 1.1835 but recovered towards the current 1.1860 price zone as the day came to an end. The coronavirus Delta variant weighs on investors´ mood amid concerns it would delay the global economic recovery.

Over the weekend, European Central Bank President Christine Lagarde anticipated a change coming on monetary policy guidance at the upcoming meeting. The central bank already announced it would tolerate inflation moving above the 2% target to avoid prematurely tightening. On Tuesday, Germany will publish the June Consumer Price Index, foreseen at 2.3% YoY, while the US will also release inflation data, with the annual CPI foreseen at 4.9% YoY, from 5% in the previous month.

EUR/USD short-term technical outlook

The EUR/USD pair is neutral in the near-term, with a decreased bullish potential. In the 4-hour chart, the price is developing between a mildly bullish 20 SMA below the current level and a flat 100 SMA limited the upside. The Momentum indicator retreats from highs and is poised to cross into negative levels, while the RSI is flat at around 54. The daily low is the immediate support, with the bearish case becoming firmer on a break below 1.1795.

Support levels: 1.1835 1.1795 1.1750

Resistance levels: 1.1885 1.1920 1.1960   

Image by Gerd Altmann from Pixabay