EUR/USD Trading Update
On Monday morning in Europe, the EUR/USD pair dipped slightly to about 1.1428. Major currency pairs are experiencing some selling pressure as the US dollar gains strength following a disappointing weekly close.
During late trading in Asia, the US dollar index (DXY), which gauges the dollar’s performance against six major currencies, was up by 0.1% at approximately 101.00.
The dollar faced some challenges last week after the release of June’s U.S. nonfarm payrolls (NFP) data, which indicated only moderate labor demand. This situation led traders to reassess their expectations for potential interest rate hikes from the Federal Reserve.
Looking ahead, investors are eagerly anticipating the June minutes from the Federal Open Market Committee (FOMC) set to be released on Wednesday, which could provide further insights into the outlook for US interest rates.
Market participants are currently backing the dollar against the euro (EUR), even as worries about upcoming rate hikes this year from the European Central Bank (ECB) have somewhat lessened.
Traders are likely to exercise caution regarding a hawkish stance from the ECB, especially since the euro zone’s core Harmonized Index of Consumer Prices (HICP) showed greater cooling than expected in June. Last week, the flash core HICP, excluding volatile items like food and energy, fell to 2.4% from an estimated value of 2.6%.
EUR/USD Technical Analysis
The EUR/USD is currently a bit lower at around 1.1430 and continues to stay below the 20-day exponential moving average (EMA) of 1.1462, hinting at a short-term bearish trend. Being below this key barrier suggests that any potential rally is capped for the moment. The relative strength index (RSI) hovering near 42 indicates some weak but steady downward momentum, rather than a fully oversold situation.
On the upside, initial resistance appears at the 20-day EMA of 1.1462. A daily close above this threshold would be necessary to relieve the current bearish pressure and possibly pave the way for a more sustained recovery. If key currency pairs break above the moving averages, there’s potential for a rise towards 1.1500. Conversely, the primary support zone is around the June 24th low of 1.1325. A drop below this could see it test 1.1300, followed by the May 29, 2025 low of 1.1210.
Economic Indicators
Final Release: Wednesday, July 1, 2026 09:00 (Prel)
Frequency: Monthly
Actual: 2.4%
Consensus: 2.6%
Previous: 2.6%
The Harmonized Core Index of Consumer Prices (HICP) tracks price changes for a selection of goods and services in the European Monetary Union. This index is adjusted monthly, as all member states adopt a consistent methodology with weighted contributions. Year-over-year comparisons illustrate pricing shifts from a base month to the same time last year. The core HICP is significant in gauging inflation and shifts in purchasing trends. Generally, higher figures indicate a bullish trend for the euro (EUR), while lower readings suggest bearish sentiment.
