EUR/USD: forecast for May 30 - June 5
During the past week EUR/USD fell to the 1.1130 area, but then returned to 1.1200. The pair basically visited the lower border of the uptrend, which has been in place since December and the support level survived initial attack of the bears.
The new part of bailout package was unlocked for Greece. The nation is now in line to receive 10.3 billion euros ($11.48 billion) in new loans. The deal has removed one of the potential risks for the euro this summer.
The ECB will meet on Thursday, June 2, and provide its updated economic forecasts, which may be a bit better than in March. While recent indications have been that the ECB is in ‘wait and see’ mode with regards to monetary policy and higher oil prices helped to increase long-term inflation expectations, the tone of comments could still prove cautious as the economic growth in the euro area is set to slow in the second quarter. Before the meeting the euro zone’s flash CPI data is due on Tuesday: the data will likely be weak.
200-day MA for EUR/USD is in 1.1100 zone, and there’s 50% Fibo at 1.1060. These are rather good support levels. Decline below the latter will open the way down to 1.0925 – such move will be possible in case of a very good data from the US and hawkish comments from the Federal Reserve. Also note that OPEC meeting on Thursday may turn out positive for USD. Resistance is at 1.1218 and 1.1350.