• EUR/USD bulls take on the bear’s commitments from support. 
  • A retest of support may open prospects of a continuation to the upside. 

The single unit is slightly higher in North American trade at 1.2156 after travelling from a low of 1.2126 and a high of 1.2168. 

EUR/USD has been in a strong uptrend since the end of March as the US dollar sours in the face of risk-on markets due to the prospects of the global recovery.

However, the greenback is not going down without a fight and has shown signs of strength at the start of the week as new restrictions in Asia to contain COVID-19 supported safe-haven currencies, while bitcoin extended its slide.

The mild risk-off tone has pushed JPY higher and left the USD mixed on the crosses and a touch weaker in the New session as measured by the DXY index which is currently down by some 0.15% at the time of writing.

In general, focussing on the greenback, the release of the US Consumer Price Index numbers on 12 May generated a rally in the dollar as investors started to doubt how long the Federal Reserve will be able to retain its ultra-dovish stance.

Looking to the futures market’s positioning the greenback, net short USD positions were acum8liating to overstretched levels into the data according to the CFTC report. 

There was a short squeeze which likely transpired into the spot market, albeit which has now been replenished by the bulls in EUR/USD moving back towards the May highs, 

Looking ahead to the week, it is expected to be relatively quiet for economic data.

However, investors will be anxious to see minutes on Wednesday from the Federal Reserve’s policy meeting last month.

Markets will be looking for more light on the policymakers’ outlook of an economic rebound and clues regarding their thinking about inflation spikes and the ongoing economic recovery.

EUR/USD technical analysis

Still, the greenback is struggling to gain momentum and the euro is now above a key technical level as follows:

Daily trading

4-hour analysis