EURUSD needs to make a decisive break above the 1.0200 mark in the near term
The euro turned slightly positive on Monday as the dollar failed to extend the Friday’s post-NFP rally. The US labor market data came in much stronger than expected, pushing the greenback higher across the board amid rising Fed rate hike bets. However, the US currency came under renewed selling pressure at the start of the week amid mixed-to-positive risk sentiment.
Against this backdrop, EURUSD regained the upside momentum on Monday, still struggling to regain the 1.0200 mark as the shared currency remains cautious despite the renewed USD weakness. On the hourly charts, the pair struggles around the key moving averages while the RSI is pointing south, suggesting the pair could stay below 1.0200 in the near term.
On the data front, the Eurozone Sentix Investor Confidence index came in at -25.2 in August from -26.4 in May versus -24.7 expected. The current situation index in the Eurozone came in at -16.3 in August after falling to the lowest level since March 2021. An expectations index rose to -33.8, still close to the lowest since December 2008. The report failed to impress euro bulls as the pair stayed nearly unchanged following the release.
This week, the European currency could face downside pressure as the dollar may derive solid support from the US CPI data due on Wednesday. Should the data show that consumer prices in the United States continued to rise in July, Fed rate hike bets will continue to grow further, thus adding to the buying interest surrounding the greenback.
Technically, EURUSD needs to make a decisive break above the 1.0200 mark in the near term so that to retarget the 1.0300 level that has been capping gains for more than a month already. On the downside, the key support arrives at the parity level.
