EUR/USD Eyes $1.0750 on Central Bank Chatter and Debt Ceiling News

It is a relatively busy day ahead for the EUR/USD. Flash Eurozone consumer confidence figures for May will draw interest later in the European session. Economists forecast the Consumer Confidence Index to rise from -17.5 to -17.0.

However, the inflation and interest rate environment could test consumer sentiment, with expectations of weaker consumption likely to weigh on the EUR/USD. Service sector activity continues to drive private sector growth. The threat of a weakening in service sector activity would fuel recessionary fears.

While it is a quieter start to the week, it is a busy week ahead for the global financial markets. Investors should monitor ECB chatter today, with inflation and central bank policy goals as the themes for the week. ECB Chief Economist Philip Lane and ECB Executive Board members Luis de Guindos and Frank Elderson are on the calendar to speak today.

EUR/USD Price Action

This morning, the EUR/USD was up 0.18% to $1.08251. A bullish start to the day saw the EUR/USD rise from an opening price of $1.08045 to a high of $1.08298.

EUR/USD Technical Indicators

Resistance & Support Levels

The EUR/USD has to avoid the $1.0798 pivot to target the First Major Resistance Level (R1) at $1.0836. A move through the Friday high of $1.08288 would signal a bullish session. However, the EUR/USD needs central bank commentary and the ECB consumer confidence numbers to support a breakout session.

In the case of an extended rally, the bulls will likely test the Second Major Resistance Level (R2) at $1.0867 and resistance at $1.09. The Third Major Resistance Level (R3) sits at $1.0936.

A fall through the pivot would bring the First Major Support Level (S1) at $1.0767 into play. However, barring a risk-off-fueled sell-off, the EUR/USD pair should avoid sub-$1.07. The Second Major Support Level (S2) at $1.0729 should limit the downside. The Third Major Support Level (S3) sits at $1.0660.

Looking at the EMAs and the 4-hourly chart, the EMAs sent bearish signals. The EUR/USD sits below the 50-day EMA ($1.08651). The 50-day EMA slid back from the 200-day EMA, with the 100-day EMA crossing through the 200-day EMA, delivering bearish signals.

A move through R1 ($1.0836) would give the bulls a run at the 50-day EMA ($1.08651) and R2 ($1.0867). However, failure to move through the 50-day EMA ($1.08651) would leave S1 ($1.0767) in view. A move through the 50-day EMA would send a bullish signal.

The US Session

Looking ahead to the US session, it is a quiet day on the US economic calendar. There are no US economic indicators for investors to consider. The lack of stats will leave the EUR/USD in the hands of US debt ceiling-related news and Fed chatter.

FOMC members Bullard, Bostic, and Barkin will follow Fed Chair Powell’s less hawkish forward guidance from Friday. However, debt ceiling talks will also influence, with US President Joe Biden and Speaker of the House Kevin McCarthy speaking today.