The EUR/USD currency pair is trading in a narrow range near 1.0850 on Tuesday, caught between contrasting central bank stances.
Factors Affecting the Euro:
- ECB Rate Cut Uncertainty: While a June rate cut by the European Central Bank (ECB) is anticipated, comments from some policymakers suggest a wait-and-see approach for further reductions, keeping the Euro from making significant gains.
- US Dollar Consolidation: The US Dollar’s recent stabilization ahead of key data releases, including FOMC minutes and PMI figures, is also contributing to the Euro’s muted movement.
Technical Analysis (EUR/USD):
- Symmetrical Triangle Breakout: The Euro is holding above a bullish Symmetrical Triangle breakout on the daily chart, indicating a potential upside bias.
- Moving Average Crossover: A recent bullish crossover of the 20-day and 50-day EMAs around 1.0780 further strengthens the near-term bullish outlook.
- RSI: The Relative Strength Index (RSI) in the 60.00-80.00 range suggests positive momentum for the Euro.
Overall:
The EUR/USD’s direction hinges on upcoming events like the FOMC minutes and US PMI data. If the ECB signals a more cautious approach to future rate cuts, or the US data disappoints, the Euro might see renewed strength. Conversely, hawkish ECB commentary or strong US data could put downward pressure on the Euro.
