EURUSD maintains its gains while traders await direction

The EUR/USD has traded in a narrow channel below 1.1800 throughout this week, with numerous attempts to break higher. Earlier this week, the pair fell below 1.1680 but regained firm support above 1.1670, eventually rising over 1.1750 amid optimism about a probable US-Iran agreement.

Despite a weaker US dollar, the pair's upside momentum remains limited, trading around 1.1770 as investors await further updates on US-Iran developments and the US Non-Farm Payrolls (NFP) report. Although the pair struggled to extend its rebound early Friday, the short-term technical view indicates that sellers will remain on the sidelines for the time being.

EUR/USD Fundamental Analysis:

The euro continues to gain from a lower demand for the US dollar. Key factors driving the pair today include developments in the Middle East and the release of the US NFP report, which is expected to be the week's most significant macroeconomic event. A notable deviation from NFP forecasts may cause a major market reaction. Additionally, as today marks the last trading day of the week, heightened volatility is expected.

On the other hand, several ECB officials are scheduled to make media appearances and participate in conferences today. Early today, European Central Bank (ECB) Vice President Luis de Guindos stated that the main factor for the ECB decision on interest rates in the June meeting will be whether the Strait of Hormuz reopens or not.

EURUSD Technical Forecast

Despite the bounce, we would maintain a mixed bias on the euro as long as it remains below the important resistance level of 1.1800 on a closing basis. The strong bullish momentum would be reversed only if the pair closes above 1.1800 again, following which it could incline further to a resistance level of 1.1880/1.1900. On the downside, 1.1670/50 is the immediate support area to focus on; any break below this level could open the doors towards the next support level of 1.1600 and 1.1570.

 

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