EUR/USD has been quite indecisive recently after breaking above 1.1720-50 area with a daily close. On Friday, the price pushed lower with certain impulsiveness but it failed to sustain by the daily close. The indecision is currently assumed as an effect of G7 Meeting which was held recently in Canada whereas more meetings are slated for this week, which will impact the dynamic of this pair in the future.
This week, the ECB Refinancing Rate is going to be published on Thursday which is expected to be unchanged at 0.00% and the ECB Press Conference will follow the policy meeting that is expected to inject a good amount of volatility in the market. Though EUR is expected to gain momentum over USD in the long term, current momentum does not provide enough evidence to expect certain definite pressure in the coming days. Today, Italian Industrial Production report was published with a decrease to -1.2% from the previous value of 1.2% which was expected to be at -0.7%. The worse economic report capped the EUR gains for a certain period after the impulsive bullish momentum observed since morning today.
On the other hand, this week US CPI and PPI and Retail Sales reports are going to be published. The data is expected to make a positive impact on USD in the short run. Though today there are no macroeconomic reports to encourage USD gains, the economic calendar contains a series of economic data later this week. Pending data is expected to provide USD with some support.
As for the current scenario, certain volatility and correction is expected in this pair as the fundamentals later this week for the both currencies are quite indecisive. As for the recent G7 meeting, there are certain issues about foreign trade with the US, so any positive outcome will lead to certain momentum in EUR in the nearest days.
Now let us look at the technical view. The price is currently seen to reject the bullish pressure after an impulsive momentum throughout the day today. The price is being held by the dynamic level of 20 EMA currently, trading above 1.1720-50 area. This indicates certain bullish momentum is still going on. As for the current scenario, the price is expected to retrace towards 1.1720-50 area before pushing higher towards 1.1900 and later towards 1.2050 area in the coming days. Though there are certain chances that the price may proceed lower, the price needs to close below 1.1720 with a daily candle to push lower with a target towards 1.1550 in the future. As the price remains above 1.1720 with a daily close, the bullish bias is expected to continue further.
