EUR/USD Daily Forecast – Euro Near 100-Day MA Support

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Published: Jul 3, 2019, 08:59 UTC

After a sharp fall to start the week, downside momentum in EUR/USD is subsiding and with the 100-day moving average in sight, I think this is a area where the pair can reverse higher.

Gold Prices are Signaling a Turn in the Dollar

Much of the dollar strength in the early week is attributed to news over the weekend about a trade truce between the US and China. In yesterday’s forecast I talked about various reasons why this development is not likely to lead to a sustained move in the markets.

The momentum in EUR/USD has died down following the initial fall at the start of the week. The pair closed relatively flat on Tuesday after a failed rally above the psychological 1.1300 handle.

But more important than a slowing of momentum in the pair is the rise in gold prices. The precious metal has been particularly sensitive to fundamental developments in the US. Gold nearly broke to fresh six-year highs today which seems to suggest the dollar bounce might be over, or very close to it.

On the data front, the ADP will release their employment change figures later today to provide the latest view on the US labor markets. Considering that Thursday is a holiday in the US, we may see a slowing of volatility after the European close today.

Technical Analysis

As mentioned, the 100-day moving average is within close proximity. Currently the indicator is residing at 1.1260. I see some more resistance at 1.1265 to create a strong confluence. The latter level marks the May high. This level held the pair lower on a few attempts until the eventual break in early June.

EURUSD Daily Chart

To the upside, the 1.1300 level continues to be a main hurdle. On the daily chart above, a horizontal level at 1.1305 is marked to be exact. But generally speaking, it will take a sustained move above 1.1300 to encourage bulls.

In the event the pair breaks below the support confluence, the next area of interest falls in around 1.1237. There is a horizontal level there, as well as the lower bound of a rising trend channel that originates from a low printed in late May.

EURUSD 4-Hour Chart

Bottom Line

EUR/USD has potential to turn higher as trade truce optimism is starting to fade
US jobs data will be Today and Friday’s US jobs data can provide a trigger for a EUR/USD bullish reversal
Markets might be thin tomorrow as Americans traders celebrate the 4th of July holiday.

About the Author

Jignesh Davdaauthor

Jignesh has 8 years of expirience in the markets, he provides his analysis as well as trade suggestions to money managers and often consults banks and veteran traders on his view of the market.