The euro extended gains during Monday’s American session, pushing EUR/USD above 1.1420 as markets weighed mixed Eurozone sentiment data against upcoming German inflation figures. While the June Business Climate index slipped to -0.38 from a revised -0.27, the broader Economic Sentiment Indicator unexpectedly rose to 95.0, surpassing the 94.3 forecast and the prior 93.7 reading, providing underlying support for the single currency.
Focus now shifts to Germany’s preliminary Harmonised Index of Consumer Prices (HICP) for June, due Tuesday. May’s headline figure cooled to 2.7% year-on-year from 2.9% in April. A stronger-than-anticipated print could bolster the euro by reinforcing bets that the European Central Bank (ECB) will maintain restrictive policy settings for an extended period.
Investors will also monitor German Retail Sales for further insight into household demand. April data showed a 0.3% month-on-month decline, beating the anticipated 0.5% drop, though the reading still signals fragile consumer momentum.
Short-term technical analysis:
On the four-hour chart, EUR/USD is trading near 1.1421. The pair remains above the 20-period Simple Moving Average (SMA) at 1.1376 and a horizontal support level at 1.1415, indicating a mildly constructive tone. However, upside momentum is capped by the 100-period SMA at 1.1494. The Relative Strength Index (RSI) at 58 reflects improving bullish momentum without reaching overbought territory, suggesting a neutral-to-slightly bullish near-term outlook as price consolidates between nearby support and resistance.
Immediate resistance lies at 1.1434, a horizontal barrier that could stall advances ahead of the more critical 100-period SMA at 1.1494. To the downside, initial support sits at 1.1415, followed by 1.1401 and 1.1381. A breach of the 20-period SMA at 1.1376 would undermine the constructive bias and risk a deeper correction.
