The major currency pair is neutral early in the week – the asset is trading at 1.0567. EUR/USD is barely moving – all comments left by the US Fed Chairman Jerome Powell last week have already been included in prices. Now it’s time to take a break and consolidate.
The Fed remains a fervent supporter of the idea of continuing to continue raising the benchmark interest rate – huge hikes and no pauses. Monetary policymakers fear recession risks and complications in the labor market but consider fighting inflation a priority. Anyhow, all fiscal moves of the regulator are clear and transparent, which is de-stressing the market a little bit. The labor market numbers from the US will be published on 8 July, so there is time to consolidate and revise mid-term priorities.
Technical Outlook – EUR/USD
In the H4 chart, EUR/USD is still correcting upwards after completing the previous descending wave; right now, the pair is forming the fifth structure of this correction. Possibly, today the asset may grow to reach 1.0620 at least and then resume trading downwards with the target at 1.0343. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is growing towards 0. Later, the line may rebound from this level and resume falling to update the lows.
As we can see in the H1 chart, EUR/USD is consolidating around 1.0550. Today, the pair may continue trading upwards to reach 1.0620 and then start another decline with the target at 1.0480. From the technical point of view, this idea is confirmed by the Stochastic Oscillator: after breaking 50 upwards, its signal line is heading towards 80.