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EURUSD tests 1.1560 to 1.1566, but bulls face headwinds
The pair is watching US July CPI on Wednesday, with a move through the 100DMA and daily cloud top needed to build a fresh bullish signal toward 1.1626.
EURUSD probed again through barriers at 1.1560 to 1.1566, the 100-day moving average and the daily cloud top, after a Friday false break higher. Despite the attempt to push through, the euro has not yet shown enough strength to secure a final breakout in the near term, according to Action Forex.
The outlet said the euro benefited from weak NFP data on Friday, which further pressured the US dollar as expectations for a Fed rate hike in September faded. However, EURUSD still appears to be held by the 1.1560 to 1.1566 zone, with extended consolidation between 1.1515 and 1.1560 expected before another push.
Traders are set to look to US July CPI data on Wednesday for fresh details on the policy outlook, with Euro expected to benefit from weaker inflation. Action Forex also pointed to 1.1586, the 50% retracement barrier, as a key level for a potential attack, with 1.1626 next at the 200DMA.
Action Forex added that dips ideally should hold above the broken 38.2% Fib resistance at 1.1524 to keep the bullish case intact. It warned that a break of the 1.1500 support zone would signal a deeper pullback.