EUR/USD sellers maintain near-term control, what levels to look out for next?
EUR/USD is basically unchanged on the day as price action remains muted
The range for the day is a measly 17 pips as price sits between 1.1151 to 1.1168 in trading so far. Right now, price is more or less unchanged near 1.1158 as traders continue to look for fresh direction in markets to start the week.
But for EUR/USD, the near-term bias continues to favour sellers as they will be looking for a sixth consecutive day of declines in the pair. There are light bids noted around 1.1150 alongside decent-sized expiries rolling off today so that could play a role in limiting price movement in the European morning session.
But looking at the daily chart:
The overall bias continues to favour sellers as price sits well within the downwards channel noted above. Further support is seen closer to 1.1135 before the 26 April low @ 1.1112 will be called into question again, in the event of a downside move.
A key risk event for the euro this week is the European Parliament elections, which will begin on Thursday, 23 May, to Sunday, 26 May. Besides that, we'll also have flash PMI readings for May on Thursday as well so be on the look out for that as it will dictate euro sentiment later on in the week.
But until we get there, I would say any upside for the euro remains limited as I would expect the key hourly moving averages to hold. As such, any upside bias should remain capped by the 100-hour MA and 200-hour MA seen closer to 1.1190-00 currently.
Hence, those will be the key near-term levels to watch out for as we navigate through the trading week. However, given political risks (even though minimal), I would expect the euro to remain softer ahead of Thursday trading.