- The EUR/USD forecast indicates declining hopes for a near-term end to the Ukraine war.
- Ukraine’s president postponed his journey to Saudi Arabia.
- Market participants are looking forward to the FOMC meeting minutes.
The EUR/USD forecast indicates declining hopes for a near-term peace deal to end the Russia-Ukraine war. While this hurts the euro, the dollar gains on safe-haven demand as market participants dump risky assets.
At the start of the week, the euro rallied to new highs after reports that Trump was ready to mediate a ceasefire deal between Ukraine and Russia. Trump said the two top leaders were ready for peace, which would allow the Eurozone economy to recover from the impacts of the war. The two leaders were to meet with Trump in Saudi Arabia to discuss a peace deal.
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However, things changed slightly when Ukraine’s president postponed his journey to Saudi Arabia. Zelenskyy is weary of a deal between the US and Russia behind his back. Meanwhile, Russia has moved to demand more from the peace deal, which could lead to further delays. Tensions between the two nations could prolong the Ukraine war and hurt the euro. Meanwhile, the dollar will benefit from safe-haven demand.
Elsewhere, market participants are looking forward to the FOMC meeting minutes, which might contain clues about future policy moves. Market participants are currently pricing two rate cuts this year after a downbeat sales report on Friday revealed weka consumer spending.
EUR/USD key events today
EUR/USD technical forecast: Bears face the 30-SMA support
On the technical side, the EUR/USD price has fallen to the 30-SMA support after failing to break above the 1.0500 resistance level. At the same time, the RSI has dropped to the pivotal 50 level, separating bullish and bearish momentum. At this point, bulls and bears are likely fighting for control.
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Bulls took control when the price broke above the 30-SMA and the 1.0400 resistance level. However, the 1.0500 is a solid resistance level that has reversed the trend before. Therefore, if the price breaks below the 30-SMA, bears will take charge and target lower support levels.
On the other hand, if bulls remain in the lead, EUR/USD will bounce off the 30-SMA to retest the 1.0500 resistance. A break above this level would solidify the bullish bias and continue the uptrend.
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