EUR/USD appreciated by 2.1% to 1.0940 so far in July from its trendline support near 1.07, DBS senior FX strategist Philip Wee.

A significant trendline resistance at 1.0970

“This month’s rally was attributed to the European Central Bank’s signal at its forum in Sintra (on July 2) for a pause at today’s governing council meeting (which it did) vs. more Fed officials opening the door for a rate cut this year on US inflation resuming its decline amid over the rise in the unemployment rate.”

Politically, the Euro (EUR) was relieved that the far-right National Rally party fell to third position in the second round of the French elections despite its outsized gains in the first round. However, EUR/USD is coming up against a significant trendline resistance of around 1.0970. EUR is feeling the drag from some unwinding of yen carry trades.