EURUSD bounced back on Monday

After a subdued performance late last week, the EUR/USD bounced back on Monday, challenging overhead resistance at 1.0725. A successful clearance of this technical barrier could pave the way for a move towards 1.0755. Further strength from this point onwards would shift focus to the 1.0800 handle, where the 50-day and 200-day simple moving averages converge.

In the event of a market retracement, support is expected near the psychological level of 1.0700, followed by April’s swing lows around 1.0600. Prices are likely to establish a base in this region during a pullback ahead of a possible turnaround. However, if a breakdown occurs, the possibility of a rebound diminishes, as this move could lead to a drop towards the 2023 trough at 1.0450.

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EUR/USD continued its upward momentum on Thursday as the prevailing positive market sentiment supported risk-sensitive currencies such as the Euro.

This improved risk appetite can be attributed to dovish comments from Fed Chairman Powell on Wednesday. Powell dismissed the possibility of raising interest rates after the Fed decided to maintain interest rates at 5.25%-5.50% in its May meeting.

The EUR/USD pair increased slightly to nearly 1.0720 during the European session, currently trading around 1.0716.

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EUR/USD extended its bullish streak into the fourth trading session, but is still trading within Friday's range so can be considered sideways for the time being. The short-term outlook for this pair remains positive as it is trading above the 20 EMA at 1.0730.