EUR/USD Key Levels: 1.075 - 1.081 - 1.066

30 lip

General Overview:
The EUR/USD pair has recently lost ground in a short-term bullish recovery, testing new two-week lows near the 1.0800 level, as the movement's momentum has drained out ahead of updates on EU GDP data. The latest Federal Reserve interest rate decision is expected on Wednesday, with a new round of US Nonfarm Payrolls (NFP) scheduled for Friday.

Fundamental Analysis:
The US Dollar (USD) started the week on a positive note, reversing consecutive daily gains in EUR/USD and testing three-day lows near the 1.0800 region. Expectations of interest rate cuts by the Federal Reserve (Fed) and the European Central Bank (ECB) after the summer break have influenced market dynamics.

In terms of monetary policy, the Fed is expected to keep rates unchanged at the July 31 meeting, while the easing cycle is anticipated to begin in September. The ECB, according to recent comments from Vice President Luis de Guindos, may also cut rates in September. This policy divergence between the Fed and the ECB could lead to further weakening of the European currency in the medium term.

Key Macroeconomic Data:
Market participants will closely follow the release of preliminary Q2 GDP data from both Germany and the Eurozone, as well as advanced inflation data from Germany, scheduled for July 30. The preliminary Eurozone CPI report will be released on Wednesday, followed by the outcome of the FOMC monetary policy meeting. Finally, key US macroeconomic data, including the Nonfarm Payrolls (NFP) report scheduled for Friday, will be crucial in determining the next moves for the EUR/USD pair.

Technical Outlook:
From a technical perspective, spot prices showed resilience below the 50% Fibonacci retracement level of the June-July rally on Monday, although the lack of significant buying suggests caution for bulls. Oscillators on the daily chart are starting to gain negative traction, suggesting that the path of least resistance for EUR/USD is to the downside.
Spot prices could weaken further below the 61.8% Fibonacci level near the 1.0775 region and test the next relevant support near the 1.0745 horizontal zone. This is closely followed by the 78.6% Fibonacci level near the 1.0730 area, below which EUR/USD could challenge the June monthly low, around the 1.0660 region, with some intermediate support near the psychological 1.0700 mark.

Conversely, any subsequent move up is likely to confront resistance near the 1.0840-1.0845 region or the 38.2% Fibonacci level. Sustained strength beyond this could lift the EUR/USD pair above the 1.0865 horizontal barrier towards the 1.0885-1.0890 region. Continued buying beyond the 1.0900 level should allow bulls to aim back towards retesting the multi-month peak, around the mid-1.0900s.