EUR/USD Reverses Gains and Faces Resistance Around 1.0980 Amid Early European Trading

EUR/USD faces resistance around the 1.0980 level in early Tuesday trading in Europe, reversing its gains for the second consecutive day.

Arslan Butt•Tuesday, August 1, 2023•1 min read

[[EUR/USD]] faces resistance around the 1.0980 level in early Tuesday trading in Europe, reversing its gains for the second consecutive day. The failure to cross the 21-SMA resulted in the Euro pair retracing from Friday’s corrective bounce off a three-week low.

Despite the recent weakness, sluggish MACD signals and an RSI (14) below 50.0 indicate potential bottom-picking activity for EUR/USD . An upward-sloping support line from May 31, near 1.0960, emerges as a key challenge for Euro bears at the moment.

During the decline, the pair may encounter intermediate halts at the 50% Fibonacci retracement level of 1.0955 and the latest swing low around 1.0945. A further target for EUR/USD is the previous monthly low of approximately 1.0830.On the upside, a clear break above the 21-SMA level at 1.1025 requires validation from the double tops around 1.1050 before challenging a two-week-old descending resistance line around 1.1105.

If EUR/USD maintains strength beyond 1.1105, there is a possibility of witnessing a run-up towards the previous monthly high of around 1.1275.

Fundamentally, a negative market sentiment, along with reduced hawkish bias surrounding the European Central Bank (ECB) due to recent Eurozone data, weighs on the EUR/USD pair ahead of key US economic data releases, including the ISM Manufacturing PMI for July and JOLTS Job Openings for June.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Open a FREE Trading Account

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.