Bearish view

• Sell the EUR/USD pair and set a take-profit at 1.1700.
• Add a stop-loss at 1.1950.
• Timeline: 1-2 days.

Bullish view

• Buy the EUR/USD pair and set a take-profit at 1950.
• Add a stop-loss at 1.1700.

(Click on image to enlarge)

The EUR/USD exchange rate continued its bull run last week, even after the US published strong nonfarm payrolls (NFP) data. It peaked at 1.1825, the highest level in years, and 16.17% above the lowest level this year.
 

FOMC minutes and EU retail sales data ahead

The EUR/USD exchange rate continued its strong surge this month as the US dollar index plunged to the lowest level since 2022. The index crashed even after the Bureau of Labor Statistics (BLS) released strong jobs numbers.

According to the bureau, the economy added over 147,000 jobs in June, much higher than the median estimate of 100k. These jobs numbers were much different from the ADP estimate that showed that the economy lost over 33k jobs during the month.

The report implied that the Federal Reserve will not cut interest rates this month as some analysts were expecting. Instead, analysts now expect the central bank to cut interest rates in the September meeting.

The next key catalyst for the EUR/USD pair will be the upcoming European retail sales data. Economists expect the numbers to show that the monthly retail sales data dropped by 0.8% in May after growing by 0.1% in the previous month. This slowdown will translate to an annual growth rate of 0.1%, lower than April’s 2.3%.

Still, while these numbers are important, their impact on the pair will be limited as investors already anticipate the European Central Bank (ECB) to hold interest rates steady in the coming meeting.

The other notable catalyst for the EUR/USD pair will be the upcoming FOMC minutes an the deadline for the US and European tariffs. A deal between the two economies will lead to more euro gains.

EUR/USD technical analysis

The daily chart shows that the EUR/USD exchange rate has been in a strong rally in the past few months. It recently crossed the important resistance level at 1.1572, the highest swing on April 21. Moving above that level invalidated the double-top pattern.

The pair has remained above the 50-day and 100-day Exponential Moving Averages, a sign that the momentum continues. Top oscillators like the Relative Strength Index (RSI) and the MACD indicators have all pointed upwards.

Therefore, the pair will likely pull back this week, and possibly retest the support at 1.1572 and then resume the uptrend.

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