EUR/USD Price Forecast: A Return to $1.060 to Bring $1.070 into Play

After a quiet start to the week for the EUR, it is a busier day on the Eurozone economic calendar.

Ahead of the European open, German consumer confidence figures drew interest. In July, the GfK Consumer Climate fell from -26.2 to a new record low of -27.4 versus a forecasted -27.6.

According to the June report,

• The ongoing war in Ukraine and disruptions to supply chains are causing energy and food prices in particular to skyrocket, resulting in a gloomier consumer climate than ever before.
• The economic expectations indicator fell by 2.4 points to -11.7, highlighting fears of a recession. Compared with the same time in 2021, the indicator was down 70 points.
• Income expectations fell by 9.8 points to a 20-year low of -33.5 points. Compared with the previous year, income sentiment was down almost 68 points.
• Propensity to buy also deteriorated, with the indicator falling by 2.6 points to -13.7, the lowest level since Oct-2008.

Later this morning, ECB President Lagarde and ECB members Lane and Elderson are due to speak. We expect any chatter on inflation, the economy, and monetary policy to have a more material impact on the EUR/USD pair.

EUR/USD Price Action

At the time of writing, the EUR was up 0.11% to $1.05939.

A mixed start to the day saw the EUR fall to an early low of $1.05703 before striking a high of $1.06061.

The EUR/USD left the Major Support and Resistance Levels untested early on.

Technical Indicators

The EUR/USD will need to avoid the $1.0581 pivot to retarget the First Major Resistance Level at $1.0615.

Demand for riskier assets will need to improve to support a breakout from the morning high of $1.06061.

An extended rally would test the Second Major Resistance Level at $1.0649 and resistance at $1.065. The Third Major Resistance Level sits at $1.0716.

A fall through the pivot would bring the First Major Support Level at $1.0548 into play.

Barring an extended sell-off throughout the day, the EUR should avoid sub-$1.05. The Second Major Support Level at $1.0514 should limit the downside.

The Third Major Support Level sits at $1.0446.

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bullish signal.

This morning, EUR sat above the 100-day EMA currently at $1.05587.

The 50-day EMA narrowed to the 100-day EMA, with the 100-day EMA closing on the 200-day EMA, EUR/USD price positive.

A move through the 200-day EMA, currently at $1.05962, would support a run at $1.070.

The US Session

Economic data from the US include CB Consumer Confidence figures for May. Expect weak numbers to move the dial.