Selling Opportunities Emerge as Price Tests Trend-Following Moving Average

Summary:

A rejection would direct the price toward the 0.618 Fibonacci expansion level at 1.1301, which also functions as a psychological support level.

Sell EURUSD

EXP

PENDING

1.14760

ENTRY

1.13000

TGT

1.15300

1.14365 -0.00053 -0.05%

Point

PENDING

1.13000

TGT

CLOSING

1.14760

ENTRY

1.15300

U.S. consumer data continued to show resilience during June. Control group retail sales, a key benchmark for calculating Gross Dollar Product (GDP), increased by 0.5% month-on-month. This represents a moderation from the previously recorded 0.8%, matching market expectations.

The labor market also maintained a solid performance. Initial jobless claims came in at 208,000 for the week ending July 11, coming in below the 217,000 projected by analysts. Along the same lines, the Federal Reserve's Beige Book highlighted that employment activity remains robust, noting that several districts reported job gains ranging from modest to solid.

This environment has helped maintain upward pressure on U.S. Treasury yields, with the benchmark 10-year yield advancing by approximately 3 basis points to settle around 4.58%.

Meanwhile, remarks from Federal Reserve officials reinforced the view of an institution that remains concerned about sticky inflation. Dallas Fed President Lorie Logan argued for the necessity of keeping interest rates slightly higher to better balance economic risks. At the same time, Kansas City Fed President Jeffrey Schmid pointed out that while the labor market remains stable, inflation continues to show signs of persistence across a broad range of goods and services.

Consequently, money markets continue to price in a high probability that the Fed will keep rates unchanged in July. Nonetheless, expectations for a potential rate hike in October remain relevant, carrying a probability of nearly 57% according to data from Prime Terminal.

In the Eurozone, several European Central Bank (ECB) policymakers have recently reiterated their readiness to tighten monetary policy further if inflationary risks intensify once again. Austrian Central Bank Governor Marin Kocher stated that the institution is prepared to act in the face of potential second-round inflationary effects, while Bundesbank President Joachim Nagel maintained that taking decisive action remains appropriate if circumstances demand it.

However, the latest economic indicators continue to reflect weak industrial activity. Eurostat reported that Eurozone industrial production contracted by 0.2% in May, contrary to expectations of 0.2% growth and following a revised 0.3% expansion in April. In year-on-year terms, manufacturing output fell by 1.2%, a sharper decline than the market had anticipated.

At the same time, final inflation data continued to point to a gradual moderation of price pressures. In Germany, the Harmonized Index of Consumer Prices (HICP) slowed to 2.4% year-on-year in June from 2.7% in May, while in France, annual inflation declined to 2.0% from the 2.8% recorded the previous month. These figures support the view that inflation continues to edge closer to the ECB's targets, though the central bank maintains a cautious stance given the risks that still remain. Selling Opportunities Emerge as Price Tests Trend-Following Moving Average_1

Selling Opportunities Emerge as Price Tests Trend-Following Moving Average_1

Technical Analysis

EURUSD rebounded downward upon approaching the 200-period moving average zone, which currently sits at 1.1476, while the 100-period moving average lies below the price at 1.1415. As long as the 200-period moving average is not broken to the upside, we could see another downward move. This moving average has tracked the broader bearish trend, and the price has rejected downward each time it nears this zone. In this case, a rejection would direct the price toward the 0.618 Fibonacci expansion level at 1.1301, which also functions as a psychological support level.

Looking at the oscillators, the RSI climbed to the 64 level, drawing close to overbought territory. Since this upward move was a pullback, RSI readings do not typically reach extremely high levels. Meanwhile, the MACD histogram has just crossed to the downside; if it begins to gain depth, it would add weight to the downward move. With the signal lines sitting just slightly above the neutral zone, a bearish crossover would once again favor a downward outlook.

Trading Recommendations

Trading direction: Sell

Entry price: 1.1476

Target price: 1.1300

Stop loss: 1.1530

Validity: Jul 29, 2026 15:00:00

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