EUR/USD Price Forecast: Bulls Eye $1.065 as Indicators Turn Bullish

After a choppy week for the EUR, with private sector PMIs pegging the EUR back from a return to $1.06, the market focus shifts to geopolitics and monetary policy.

It is a quiet day ahead on the Eurozone economic calendar, with no stats for the markets to consider.

With the shift in ECB monetary policy, the uncertainty now is to what extent the ECB will lift rates to combat inflation. The June prelim PMIs highlighted persistent inflationary pressure at the end of the second quarter, suggesting the need for a similar approach to the Fed.

The economic indicators, however, question how much the ECB can lift rates without materially impacting the economy.

Late in today’s US session, ECB President Lagarde is due to speak. Any views on the economy, following last week’s stats, and monetary policy will influence.

EUR/USD Price Action

At the time of writing, the EUR was up 0.25% to $1.05838.

A mixed start to the day saw the EUR fall to an early low of $1.05474 before striking a high of $1.05912.

The EUR/USD broke through the First Major Resistance Level at $1.0581.

Technical Indicators

The EUR/USD will need to avoid the First Major Resistance Level and the $1.0547 pivot to target the Second Major Resistance Level at $1.0606.

Demand for riskier assets will need to improve to support a breakout from the morning high o of $1.05912.

An extended rally would test the Third Major Resistance Level sits at $1.0665.

A fall through the First Major Resistance Level and the pivot would bring the First Major Support Level at $1.0522 into play.

Barring an extended sell-off throughout the day, the EUR should avoid sub-$1.05 and the Second Major Support Level at $1.0487.

The Third Major Support Level sits at $1.0428.

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 $1.05557.

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

Avoiding a fall through the 100-day EMA would support a run at the 200-day EMA, currently at $1.0597, and the Third Major Resistance Level at $1.0665.

The US Session

Economic data from the US include durable and core durable goods orders. The markets will be looking for any weak numbers that could raise further concerns over the economic outlook.