EUR/USD: Eyes on ECB's Forward Guidance in its July Meeting

Summary:

EUR/USD is range-bound as investors focus on the upcoming ECB meeting for forward guidance on its policy. US inflation data is also a key driver.

EUR/USD is range-bound as investors wait for new guidance from the European Central Bank (ECB) on the monetary stimulus. While speaking on Bloomberg Television, the bank’s President Christine Lagarde noted that July’s Governing Council meeting is “going to be an important meeting.” Besides, she has stated that the current bond-purchasing program of €1.85 trillion is likely to continue till March 2022. That will be followed by a transition into a different format.

In the near term, the focus is on US CPI data. Analysts expect core CPI to have risen by 0.4% MoM compared to the previous month’s 0.7%. A higher-than-expected reading is likely to exert pressure on the currency pair.

EURUSD technical outlook

EUR/USD is trading within a tight range as the bulls lack enough momentum to push the prices past the crucial resistance level of 1.1880. At the time of writing, the currency pair was down by 0.1% at 1.1864. On a two-hour chart, it is slightly above the 25 and 50-day exponential moving averages.

In the near term, EUR/USD is likely to remain range-bound between 1.1880 and 1.1840. However, depending on the outcome of the US inflation data on Tuesday, the pair may move past the channel’s lower border to find support at 1.1800. On the flip side, a move above the channel’s upper border will place the resistance level at 1.1900.