EUR/USD dropped to 1.0818 last week but recovered since then bottoming out last week’s decline. Initial bias is mildly bullish this week for some consolidations as long as 1.0818 support holds. However over-all trend in the pair remains bearish and will be resumed if we have a break of the support. However 1 hour time-frame analysis shows 21 and 55 EMA are crossed to the upside with a bullish MACD signal confirming a change of the bearish bias in the short term picture.
In the bigger term picture, Further decline is expected as long as 1.1063 resistance holds. Also the 4 hours time-frame analysis indicates 21 and 55 EMA are still crossed downward. As noted before, rebound from 1.0461 could have completed at 1.1466 already. Below 1.0818 will target 1.0461/0520 support zone. Nonetheless, above 1.1063 minor resistance will dampen this bearish view and turn focus back to 1.1466 instead.
The Euro currency remained under pressure as Athens continued long-running negotiations with its lenders on a cash-for-reforms deal ahead of a €305 million payment to the International Monetary Fund due on June 5.
The Greek government expressed confidence on Friday that a deal with creditors is close.
However, the country’s creditors have played down optimism over an agreement. IMF head Christine Lagarde warned Friday that a deal was very unlikely to come soon, while the European Commission said that more work must be done.
The dollar strengthened broadly in May as stronger U.S. economic data prompted investors to bring forward expectations on the timing of an initial rate hike by the Federal Reserve.
Upbeat reports on inflation, new home sales, business investment and consumer confidence during the month all indicated that the economy is gaining momentum after a weak first quarter.
In the week ahead, Friday’s U.S. employment report will be closely watched for signs of improvement in the labor market. Tuesday’s preliminary data on euro area consumer prices and Wednesday’s European Central Bank monetary policy announcement will also be in focus.