EUR/USD experienced a slight drop to about 1.1620 in early European trading on Monday. There’s a prevailing expectation for a resolution in the US-China trade tensions, which is lending strength to the US dollar (USD) against the euro (EUR). Moreover, ongoing political instability in France may hinder any significant gains for the common currency in the near term.
From a technical standpoint, EUR/USD maintains a generally positive outlook, as it continues to stay above the crucial 100-day exponential moving average (EMA) on the daily chart. Yet, the Relative Strength Index (RSI) is hovering below the midline at approximately 42.60. This suggests that further declines can’t be dismissed in the short run.
On a more optimistic note, the first resistance level is seen at the September 26 low of 1.1657. If buying interest strengthens above this point, the pair could rise to the October 3 high at 1.1758. Looking even higher, the next resistance level appears at the September 23 high of 1.1820.
Conversely, the 100-day EMA at 1.1555 acts as a significant support level for EUR/USD. If the pair breaks below this, it might head towards the July 31 low of 1.1403. Another noteworthy downside level can be found at the June 2 low of 1.1347.
