EURUSD started the week on a mixed note but managed to regain the upside bias after the initial hesitation. The pair climbed to the 1.1270 area where the intermediate resistance capped the bullish attempts. Despite the subsequent retreat, the euro retains the upside momentum and stays bullish as long as the prices remain above the 1.12 handle.
On the positive side, the safe-haven dollar demand has waned recently as investor sentiment has improved somehow. In part, this was due to the fact that the S&P agency affirmed China’s A+/A-1 ratings with a stable outlook.
On the data front, Eurozone June final consumer confidence came in at -14.7 versus the -14.7 preliminary result. Economic confidence arrived at 75.7 versus 80.0 expected while services confidence declined by 35.6 versus -25.4 expected. In general, the report confirmed that any path to recovery remains slow and protracted. Meanwhile, Spain’s consumer price index fell 0.3% compared with -0.9% projected.
At the time of writing, EURUSD was changing hands around the 1.1250 intermediate resistance, a break above which could send the prices to the mentioned intraday highs around 1.1270. In a wider picture, the common currency needs to make a decisive break above the 200-weekly moving average around 1.1330 in order to reaffirm its bullishness which is under question now.
The pair has created four long upper wicks in a row on the weekly timeframes, which could be a sign of a limited bullish potential. So, the longer the prices stay below the mentioned moving average, the higher is the risk of a downside correction in the medium term.
On the four-hour timeframes, the common currency is stuck between the 100- and 50-SMAs while the RSI is neutral, suggesting some consolidation could lie ahead in the near term. in the hourly charts, the pair is flirting with the 100-SMA, a decisive break above which will improve the short-term technical outlook for the euro.
