EUR/USD Price Forecast: ECB Policy Meeting Minutes to Test the EUR

For the EUR, it is another busy day on the Eurozone economic calendar.

This morning, German industrial production provided modest EUR/USD support. In May, industrial production rose by 0.2% versus a forecast of a 0.4% increase. Production had risen by 1.3% in April.

According to Destatis,

• Production in industry excluding energy and construction increased by 0.6%.
• Within industry, the production of capital goods rose by 2.2%, while the production of consumer goods fell by 0.9%.
• The production of intermediate goods declined by 0.4%.
• Outside industry, energy production slid by 5.8%, while production in construction rose by 0.4%.

Later this morning, the ECB will draw plenty of market interest

ECB members Enria, McCaul, and Lane, are due to speak, with the ECB monetary policy meeting minutes also in focus.

Economic indicators from the Eurozone and the ongoing war in Ukraine have led to uncertainty over the September policy decision. The minutes and ECB member chatter could provide some clarity, though much will likely depend on the next round of inflation numbers.

EUR/USD Price Action

At the time of writing, the EUR was up 0.28% to $1.02090.

A choppy morning saw the EUR fall to an early morning low of $1.01760 before rising to a high of $1.02209.

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

Technical Indicators

The EUR/USD will need to hold above the $1.0206 pivot to target the First Major Resistance Level (R1) at $1.0251 and the Wednesday high of $1.02766.

ECB chatter and the minutes need to be hawkish to support a bullish session.

An extended rally could test resistance at $1.030 and the Second Major Resistance Level (R2) at $1.0321. The Third Major Resistance Level (R3) sits at $1.437.

A fall through the pivot would bring the First Major Support Level (S1) at $1.0136 into play.

Barring an extended sell-off throughout the day, the EUR should avoid sub-$1.00. The Second Major Support Level (S2) at $1.0091 would likely limit the downside.

The Third Major Support Level (S3) sits at $0.9976.

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

At the time of writing, the EUR sat below the 50-day EMA, currently at $1.03768.

The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA, EUR/USD price negative.

While a move through R1 would support a return to $1.03, the EUR/USD pair would likely fall short of the 50-day EMA.

The US Session

ADP Nonfarm Employment Change and weekly jobless claim figures will draw interest today.

While upbeat numbers would ease concerns over the US economy, the figures will also influence sentiment towards Fed monetary policy.