In the early hours of European trading on Monday, the EUR/USD pair maintains a flat trajectory around 1.0770. The lack of clear direction is evident as investors await key events unfolding in the United States throughout the week. Notably, attention is drawn to the upcoming release of the US April Producer Price Index (PPI) scheduled for Tuesday, followed by the final reading of the Consumer Price Index (CPI) on Wednesday.
From a technical standpoint, the EUR/USD pair remains entrenched within a descending trend channel that originated in mid-December 2023. This prevailing bearish sentiment is underscored by the pair’s position below the critical 100-period Exponential Moving Average (EMA) on the daily timeframe. However, amidst this bearish backdrop, the 14-day Relative Strength Index (RSI) maintains a bullish stance around 54.5, suggesting the potential for further upside movement.
Looking ahead, a significant resistance zone for the EUR/USD lies near the confluence of the 100-day EMA and the upper boundary of the descending trend channel, ranging between 1.0790 and 1.0800. A breakout above this zone could propel the pair towards the April 9 high of 1.0885, followed by subsequent hurdles at the March 21 high of 1.0943 and the March 8 high of 1.0981, with the psychological level of 1.1000 looming beyond.
Conversely, initial support is observed around the May 9 low of 1.0724. Further downside momentum may lead to a test of the May 2 low at 1.0650, followed by the April 16 low of 1.0600. Notably, the lower boundary of the descending trend channel at 1.0515 serves as an additional downside reference point to monitor.
As market participants await the unfolding US economic events, the EUR/USD pair navigates a landscape of uncertainty, with both bullish and bearish factors influencing its trajectory in the near term.
