EUR/USD Clears Monthly Opening Range to Eye April High

EUR/USD Outlook

EUR/USD takes out the June high (1.1012) as it carves a series of higher highs and lows, and data prints coming out of the US may keep the exchange rate afloat as the Consumer Price Index (CPI) is anticipated to show slowing inflation.

EUR/USD Clears Monthly Opening Range to Eye April High

EUR/USD may attempt to test the April high (1.1096) as it extends the advance following the weaker-than-expected US Non-Farm Payrolls (NFP) report, and the Greenback may face additional headwinds as there seems to be growing speculation for a dovish Federal Reserve rate hike later this month.

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FOREX.com Economic Calendar

The update from the US Bureau of Labor Statistics (BLS) may lead to a further advance in EUR/USD as both the headline and core CPI are expected to narrow in June, and signs of easing inflation may encourage the Federal Open Market Committee (FOMC) to adjust the forward guidance for monetary policy as the central bank appears to be nearing the end of its hiking-cycle.

Source: CME

According to the CME FedWatch Tool, market participants are pricing a greater than 60% probability the Federal Open Market Committee (FOMC) will deliver one more 25bp rate-hike this year, but a stronger-than-expected CPI print may drag on EUR/USD as it puts pressure on Chairman Jerome Powell and Co. to further combat inflation.

With that said, signs of persistent price growth may curb the recent advance in EUR/USD as it raises the scope for higher US interest rates, but the exchange rate may attempt to test the April high (1.1096) as it clears the monthly opening range.

Euro Price Chart – EUR/USD Daily

Chart Prepared by David Song, Strategist; EUR/USD on TradingView

• EUR/USD clears the June high (1.1012) as it extends the series of higher highs and lows from last week, and the exchange rate may attempt to test the April high (1.1096) as it registers a fresh monthly high (1.1027).
• A break/close above the 1.1070 (23.6% Fibonacci retracement) to 1.1090 (38.2% Fibonacci extension) region opens up the March 2022 high (1.1233), with the next area of interest coming in around 1.1270 (50% Fibonacci extension) to 1.1280 (61.8% Fibonacci retracement).
• However, failure to test the April high (1.1096) may curb the bullish price action in EUR/USD, with a move below the 1.0880 (23.6% Fibonacci extension) to 1.0940 (50% Fibonacci retracement) region raising the scope for a test of the monthly low (1.0834).
• Failure to defend the monthly opening range may push EUR/USD towards 1.0730 (23.6% Fibonacci retracement), with the next area of interest coming in around the May low (1.0635).

Additional Market Outlooks

USD/JPY Susceptible to Test of Channel Support amid RSI Sell Signal

USD/CAD Climbs Above Former Support to Eye 50-Day SMA

--- Written by David Song, Strategist

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