• The EUR/USD remains almost flat in the week, though losing 0.09%.
• Sentiment remains positive, though the EUR/USD remains in choppy trading ahead of ECB’s decision and US inflation numbers.
• EUR/USD Price Forecast: To resume downwards if the major breaks below 1.0700.

EUR/USD pares some of Monday’s losses and tests the 50-day moving average (DMA) to the upside on Tuesday during the North American session. At 1.0709, the EUR/USD exchanges hands on top of the previously-mentioned DMA at the time of writing.

A positive mood and a weaker US Dollar lift the EUR/USD

US equities are trading with gains as Wall Street’s closing looms, reflecting Investors’ positive mood. Market players’ worries about elevated prices and the Federal Reserve’s tightening conditions eased. Consequently, US Treasury yields fell, underpinning the greenback, a tailwind for the EUR/USD.

The US 10-year Treasury yield pares Monday’s gains and loses six basis points, down at 2.981%. In the meantime, the US Dollar Index, a measure of the buck’s value, grinds lower some 0.10%, sitting at 102.302.

Data-wise, the Eurozone economic docket featured the S&P Global Construction PMI for the fourth largest economies in the block, alongside the Euro area figures. The readings were mixed, though they failed to trigger a reaction in the pair. Later in the week, the European Central Bank (ECB) monetary policy lurks. The ECB President Lagarde & Co. are expected to hold rates unchanged, though market players await forward guidance regarding the APP and signals that the bank would shift policy to normal.

Meanwhile, 10-year bond yield spreads across the Euro area began to widen. Greece and Italy spread have hit the 3.87% and 3.42% threshold, respectively,

The US economic docket featured the Trade Balance, which helped ease the deficit, narrowing the most in almost nine and half years in April, as exports bounced to a record high of $252.6 billion vs. March’s $244.1 billion.

Ahead of the week, Initial Jobless Claims, inflation figures, and Consumer confidence would give GBP/USD traders the current status of the US economy.

EUR/USD Price Forecast: Technical outlook

The EUR/USD has a downward bias, despite the major’s correcting from YTD lows around 1.0300s to 1.0780s. Also, EUR/USD traders pushed the pair near the 50-day moving average (DMA) at 1.0705, though a daily close below would exacerbate a move towards the June 1 swing low at 1.0627, as the first target.

The daily moving averages (DMAs) above the spot price have a downward slope. The Relative Strenght Index (RSI), albeit at bullish territory at 53, aims lower, meaning that selling pressure begins to mount in the pair.

The EUR/USD first support would be 1.0700. Break below would expose the June 1 low at 1.0627, followed by the May 20 daily low at 1.0532, and the May 19 low at 1.0460.