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  • Consumer confidence is at a record low.
  • The dollar might resume its rally if recession fears continue.
  • The price is trading within an ascending triangle on the charts.

The EUR/USD outlook improves as the pair gains ground slightly on Monday morning as the dollar continues to decline after disappointing economic data last week from the US. A survey released on Friday showed that consumer confidence in the US economy was at a record low.

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The dollar has, however, not collapsed as much due to the global tensions over a possible recession. Investors are ready at any time to go back to buying the safe-haven dollar if things get bad.

“The dollar tends to rise when people worry about a global recession,” said Commonwealth Bank of Australia strategist Joe Capurso in Sydney.

For this reason, we might see EUR/USD resuming its fall if the dollar strengthens soon. The falling oil prices have given investors hope that inflation might not be too prolonged, the dollar is also being weighed down. If inflation peaks, we would see a less aggressive Federal Reserve, which could prevent a possible recession and restore risk sentiment.

EUR/USD key events today

There will be three speeches later in the day that investors will pay close attention to. These include speeches from ECB President Lagarde, an executive board meeting of ECB member Isabel Schnabel and FOMC member Williams.

Investors also expect data releases from the US, including core durable goods for May, which are expected to drop from 0.4% to 0.3%, and pending home sales for May, which are also expected to drop from 0.5% to 0.1%.

EUR/USD technical outlook: Short-term bulls attempting triangle breakout

EUR/USD outlook

Looking at the 4-hour chart, we see the price still trading within the ascending triangle with short-term bulls pushing it toward Resistance 1, which is the triangle’s resistance. The price is trading above the 30-SMA, and the RSI is trading above 50, showing bulls are currently in charge.

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If bulls can hold on to their momentum, we could see a break above Resistance 1, and the next target would be Resistance 2, which is a strong psychological level. However, if the ascending triangle acts as a continuation pattern, we could see bears coming in at Resistance 1 to push the price below the 30-SMA and possibly toward Support.

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