EUR/USD Holds Up Above 1.0700 in Low-Volume Session
The EUR/USD pair continued to edge lower on Monday, although trading ranges are extremely limited given the holiday in the United States and Europe.
At the time of writing, the EUR/USD pair is trading at the 1.0710 area, 0.10% below its opening price, posting the fifth daily decline in a row.
The dollar retains its strength as the optimism surrounding the achievement of a debt-ceiling deal in the US was offset by expectations that the Federal Reserve will raise interest rates further.
US President Joe Biden and House Speaker Kevin McCarthy announced they reached a deal on the debt ceiling late on Sunday. However, the agreement still needs to pass Congress.
The CME FedWatch Tool shows the probability of another 25 basis point hike by the Fed is above 58% after the Personal Consumption Expenditures inflation data came stronger than expected on Friday.
From a technical perspective, the EUR/USD pair maintains a short-term bearish bias according to indicators on the daily chart, although the negative momentum has eased over the last couple of days. At the same time, the price is trading below a downward-sloped 20-day simple moving average (SMA) and a flat 100-day SMA, which are converging above 1.0800.
On the downside, a two-month low of 1.0701 is the immediate support level, followed by a former Fibonacci resistance at 1.0580 and the 1.0500 psychological level. On the upside, the following resistance levels could be found at the 100-day SMA at 1.0815 and the 20-day SMA at 1.0870 ahead of the 1.0900 area.
At the time of writing, the EUR/USD pair is trading at the 1.0710 area, 0.10% below its opening price, posting the fifth daily decline in a row.
The dollar retains its strength as the optimism surrounding the achievement of a debt-ceiling deal in the US was offset by expectations that the Federal Reserve will raise interest rates further.
US President Joe Biden and House Speaker Kevin McCarthy announced they reached a deal on the debt ceiling late on Sunday. However, the agreement still needs to pass Congress.
The CME FedWatch Tool shows the probability of another 25 basis point hike by the Fed is above 58% after the Personal Consumption Expenditures inflation data came stronger than expected on Friday.
From a technical perspective, the EUR/USD pair maintains a short-term bearish bias according to indicators on the daily chart, although the negative momentum has eased over the last couple of days. At the same time, the price is trading below a downward-sloped 20-day simple moving average (SMA) and a flat 100-day SMA, which are converging above 1.0800.
On the downside, a two-month low of 1.0701 is the immediate support level, followed by a former Fibonacci resistance at 1.0580 and the 1.0500 psychological level. On the upside, the following resistance levels could be found at the 100-day SMA at 1.0815 and the 20-day SMA at 1.0870 ahead of the 1.0900 area.
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