EUR/USD Forex Signal 02/07: Brief Pullback Possible (Chart)

(MENAFN- Daily Forex) Bearish view

• Sell the EUR/USD pair and set a take-profit at 1.1600.
• Add a stop-loss at 1.1850.
• Timeline: 1-2 days.

Bullish view

• Buy the EUR/USD pair and set a take-profit at 1.1850.
• Add a stop-loss at 1.1600.

The EUR/USD exchange rate wavered after the latest European consumer inflation and US JOLTs job openings data. It also remained in a tight range after the better-than-expected US manufacturing PMI numbers. It was trading at 1.1778, a few points below the year-to-date high of 1825 Signals Openness to July Cut

The EUR/USD exchange rate wavered after Jerome Powell signalled that he will be willing to cut interest rates in its July meeting. He said that the bank will focus on economic data on the labor market and inflation.

The statement came as Powell continued facing substantial pressure from Donald Trump, who has called for it to cut rates by as much as a full point in the next meeting.

Trump believes that the Fed is costing the US billions of dollars by leaving rates above 4%. Indeed, recent data shows that the US is paying nearly $1 trillion in interest annually.

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Trump also believes that the Fed is puting the US at a disadvantage against other countries. For example, the European Central Bank (ECB) has slashed rates eight times in this cycle.

The EUR/USD exchange rate reacted to the latest European consumer inflation data. Eurostat data revealed that the headline CPI rose from 1.9% in May to 2% in June, while the core CPI remained unchanged at 2.3%.

More data from the United States showed that the JOLTs job openings data moved from 7.395 million in April to 7.769 million in May. This report came two days before the US published the latest nonfarm payrolls (NFP) data.

The key catalyst for the EUR/USD pair on Wednesday will be the upcoming ADP nonfarm payrolls data and a speech by Christine Lagarde.

EURUSD Chart by TradingViewEUR/USD Technical Analysis

The daily chart shows that the EUR/USD exchange rate has been in a strong bull run in the past few months. It moved to a low of 1.0175 in January to the current 1.1775.

The pair has remained above the important resistance level at 1.1572, the highest swing in April. It also remains above the 50-day and 100-day Exponential Moving Averages (EMA).

Similarly, the Relative Strength Index (RSI) and the MACD indicators have continued rising. Therefore, the most likely scenario is where it drops and retests the support at 1.1572 and then resumes the uptrend.

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