EUR/USD Price Analysis – July 14, 2023

Daily Price Outlook

The EUR/USD pair remains strong near a 17-month high, just below the mid-1.1200s, driven by a bearish US Dollar (USD).

During Friday's Asian session, the EUR/USD pair continued its upward momentum, breaking through the year-to-date high and reaching its highest level since February 2022, trading in the range of 1.1240–1.1245.

The recent decline in the US Dollar (USD) can be attributed to expectations that the Federal Reserve (Fed) will soon end its monetary tightening cycle.

Investors are increasingly confident that the central bank will maintain interest rates at their current levels for the rest of the year, following the highly anticipated 25 basis point rate hike in July.

On the other hand, the European Central Bank (ECB) meeting minutes from June indicated that policymakers are committed to extending the current cycle of rate hikes beyond July to address inflation concerns.

The ECB's economic predictions released in June also indicated that inflation would remain above its 2% target through the end of 2025. This hawkish stance, despite indications of a potential economic slowdown, continues to support the Euro (EUR) and provide additional strength to the EUR/USD pair.

However, it is worth noting that the daily chart's Relative Strength Index (RSI) is already showing overbought conditions, which may discourage new bullish bets near the current levels. Therefore, it would be prudent to wait for some short-term consolidation or a slight pullback before considering further similar moves.

Nevertheless, considering the overall backdrop, it seems that the EUR/USD pair will face minimal resistance on its upward path, and any significant corrective decline may still be viewed as an opportunity to buy.

EUR/USD Price Chart – Source: Tradingview

EUR/USD - Technical analysis

The EUR/USD pair continues its upward trajectory, approaching our target at 1.1275. The path ahead appears favorable for further gains in the short and medium term, with a potential next significant milestone at 1.1418.

As a result, we anticipate continued upward movement in the upcoming sessions, supported by the EMA50 indicator. It is crucial to note that maintaining levels above 1.1130 is essential to sustain the bullish momentum.

A break below this level could introduce a negative element that may trigger a bearish correction on an intraday basis.

For today's trading, the projected range is expected to be between the support level at 1.1170 and the resistance level at 1.1320.