USD Likely To Remain in Uptrend against The Euro in Near Future

The EUR/USD pair kicked-off the week on a quiet note, as investors await fresh impetus from the sentiment on the European open ahead of the German Prelim CPI release. The pair faced the worst week since January but recovered some ground during US session erasing daily losses but still remains nearly 150 pips below where it was last week. The greenback weakened on Friday despite better-than-expected US data.

EURUSD Weaker

The first estimate for Q1 GDP growth came in at 2.3% above the 2.0% expected. The US Dollar peaked after the report and then pulled back. Friday’s, up-move in the pair, was a triggered by a combination of retreating T-yields and profit-taking. Anyway, market’s sentiment toward the greenback has found additional support on news that the US will start talks with China to prevent a trade war, and that South and North Korean leaders met for the first time in decades, and talked de-nuclearization. This should be good for the global wellbeing and hence increase the risk sentiment in the markets.

Dollar’s trend will have to face major challenges this week, as the US will release its March PCE inflation data & there is a Fed policy meet and April employment data released scheduled this friday. None of them is foreseen offering negative surprises and readings in-line with market’s expectations will be enough to keep USD on its positive path. Today’s focus is on German inflation and US PCE index, as European markets are closed tomorrow due to Labour Day.

Traders will also focus on Euro zone’s GDP and inflation data scheduled to be released on Wednesday and Thursday respectively. The pair last week tested a major support at 1.2060, while a look at 4 hour chart showed possibility for still resistance at 1.2150. As trading session moves further this week multiple levels of support and resistance can be found at 1.2100/1.2060/1.2020 and 1.2160/1.2200/1.2245 respectively