- EUR/USD remained calm on Monday.
- The market is positive as ECB gives hope of tapering.
- US CPI and German HICP data can provide fresh impetus.
During the first trading day of the new week, the EUR/USD analysis reveals quiet trading again. The total volatility of the day this time did not exceed even 50 pips. This is not surprising since no important and interesting events occurred during Monday, either in the European Union or in the United States.
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Thus, during the day, market participants simply had nothing to react to. The EUR/USD pair still shows its interest in the resumption of the global uptrend, but this can take a very long amount of time since the volatility, in most cases, does not exceed 60 pips.
The market is continuously ignoring the fact the fourth wave of a pandemic is extending in the Europe and UK. Therefore, the pair seems poised to gain further. However, the shared currency is gaining against the Greenback because of optimism stemming from the plan of the European Central Bank to adopt a fresh strategy in its meeting on July 22.
According to the poll of Reuters, the ECB will initiate tapering of asset purchases related to the pandemic after the September meeting and will stop the purchase by the end of March.
On the other hand, ECB has announced that it can tolerate the inflation rate higher than the 2% target.
On Tuesday, the US is to publish a very important report on inflation for June, but the reaction to it can only follow if the actual value is very different from the forecast. Along with it, the market is also awaiting German HICP data due on the day. Therefore, no more important fundamental and macroeconomic events are planned for today.
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EURUSD technical analysis: What’s next to come?
On the 4-hour chart, the movement on Monday looks rather dull and sluggish. No wonder, as volatility was weak again. But, on the whole, an upward trend was formed for the pair after the downtrend line was broken. Thus, we continue to expect a continuation of the upward movement. However, the volume is too low at the moment. Meanwhile, the price remains supported by 20 and 50 SMAs on the 4-hour chart.
Support levels:
S1 – 1.1841
S2 – 1.1780
S3 – 1.1719
Resistance levels:
R1 – 1.1902
R2 – 1.1963
R3 – 1.2024
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Saqib Iqbal
