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EUR/USD Price Outlook: US Dollar Selling Puts EUR/USD Back at Familiar Resistance

EUR/USD Price Outlook: US Dollar Selling Puts EUR/USD Back at Familiar Resistance

Justin McQueen,
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EUR/USD Price Analysis & News

  • Chinese Stocks Surge, Sapping Demand from Safe-Haven US Dollar
  • ISM Non-Manufacturing PMI a Short-Term Focus
  • Euro Bulls Gear Up for EU Summit Showdown

A notable pick up in risk sentiment stemming from the impressive gains in Chinese stocks overnight sees the safe-haven US Dollar on the backfoot, which in turn has seen the Euro among the key beneficiaries of USD selling. With EUR/USD back above 1.1300, the pair is back at familiar resistance with the trendline from the March 9th peak in focus. In the short term, we look to the US ISM Non-Manufacturing PMI to generate volatility in the pair. That said, a reading firmly above the expansion/contraction level of 50 could propel the pair higher, bringing the Euro back towards 1.14.

Monday July 6th 1500BST: ISM Non-Manufacturing PMI Consensus 50.1 (High/low range = 54.0-44.9)

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EUR/USD Price Chart: Daily Time Frame

Source: IG Charts.

Euro Bulls are Awaiting the EU Summit

Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -4% 1% -2%
Weekly 8% -2% 4%
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The main focus for the Euro this month will be on the EU summit on July 17th, in which the key topic will be on the EU recovery fund. In turn, speculators have grown increasingly bullish on the Euro in anticipation of a potential agreement. That said, with last week’s legal battle between the German Constitutional Court and the ECB coming to an end, there is a little less uncertainty out there for the Euro, the mood music remains positive for now. Alongside this, the STOXX banking index has also continued to trend higher and thus becoming less of a drag on the Euro.

EUR/USD vs STOXX Bank Index

Source: Refinitiv.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.