The EUR/USD pair recorded modest losses around 1.1620 in early European trading on Monday, as investors looked for signs of progress in the ongoing US-China trade negotiations. Optimism for a potential compromise has lent support to the US Dollar (USD), keeping the Euro (EUR) on the defensive. Meanwhile, political uncertainty in France continues to weigh on sentiment, likely limiting the upside potential for the shared currency in the near term.
Technical outlook
From a technical standpoint, EUR/USD maintains a broadly constructive structure, holding above the 100-day Exponential Moving Average (EMA) on the daily chart.
However, momentum indicators suggest growing downside risks, with the Relative Strength Index (RSI) hovering below the neutral 50 mark at around 42.6. This setup indicates that short-term weakness could persist before any potential rebound.
Key levels to watch
On the upside, initial resistance is seen at 1.1657, the low from September 26. A sustained break above this level could trigger a move toward 1.1758, the October 3 high, followed by the next resistance at 1.1820, the September 23 high.
Conversely, immediate support lies at the 100-day EMA around 1.1555. A decisive drop below this threshold could expose the pair to deeper losses toward 1.1403, the July 31 low, with an additional bearish target at 1.1347, the low recorded on June 2.
