EUR/USD eases with investors awaiting news from US-China talks

• The Euro is showing a mild bearish stance against the US Dollar as the US-China talks extend to a second day. 
• Positive comments from US President Trump are keeping investors hopeful of a successful outcome from the negotiations. 
• The US Dollar keeps trading within recent ranges amid a lack of concrete progress.

EUR/USD is trading mildly lower on Tuesday. The pair eased to levels right below 1.1400 at the time of writing, still within the last few days' range, with investors reluctant to place large directional bets as US and Chinese representatives continue to discuss trade issues.

Positive remarks from some officials, namely US President Donald Trump's comments affirming that he is getting "good reports" from the meeting, are contributing to keeping market sentiment buoyed and have provided some support to the US Dollar (USD).

Traders, however, are likely to remain looking from the sidelines, awaiting news about concrete progress. The world's two largest economies have gone into the meeting with a constructive attitude, aiming to revive the spirit of last month's meeting in Switzerland, which led to a significant reduction in their reciprocal tariffs.

This time, however, thorny issues such as rare earths' trade, restrictions on chips' exports, or visas for students will force both parties to make sacrifices if they want to reach a deal. And this might take some time.

The US economic calendar is light today. Investors will be attentive to the US CPI on Wednesday for further insight into the inflationary impact of trade tariffs and its potential influence on the Federal Reserve's (Fed) monetary policy.

Daily digest market movers: Lack of news leads to muted market movement

• The US Dollar is nudging higher against most peers, yet still constrained within the recent ranges. The US Dollar Index (DXY) has bounced up, but it is struggling to take a significant distance from the nearly two-month lows hit last week.
  
• The trade talks between US and Chinese representatives are set to resume on Tuesday at 9:00 GMT. Trump affirmed on Monday that he is "only getting good reports," but that dealing with China is not easy. These comments feed hopes of a positive outcome, but risk appetite remains subdued.
  
• On Monday, European Central Bank's policymaker Peter Kazimir suggested that the bank might be near the end of the monetary easing cycle, echoing last week's message from President Lagarde. These comments provided immediate support to the Euro, which, however, did not last long.
  
• In the calendar today, the Sentix Confidence Index will reveal investors' opinion about the Eurozone's near-term economic outlook. The impact on the Euro, however, is likely to be limited.
  
• The highlight of the week will be Wednesday's US Consumer Price Index (CPI), which is expected to have grown steadily at 0.2% in May with the yearly inflation increasing to 2.5% from 2.3% in April. Core inflation is also expected to have accelerated, endorsing the Fed's hawkish stance.
  
• The Federal Reserve is on its blackout period ahead of next week's monetary policy meeting. Futures markets are not pricing any rate cut at least until September, with nearly two rate cuts foreseen for this year, as data from the CME Group's Fed Watch Tool shows. 

Technical analysis: EUR/USD looks for direction above 1.1370

EUR/USD keeps moving within an upward trend, but the rejection at around 1.1500 seen last week and a bearish divergence on the 4-hour chart suggest that bulls might be losing steam.

Price action shows a mild negative tone on Tuesday, but sellers should break the 1.1370 support level to confirm a deeper correction heading to 1.1315 (May 30 low)  and the 1.1215-1.1220 (May 20 and 28 lows).

On the upside, the June 3 high at 1.1455 is likely to challenge bulls ahead of the June 5 high at 1.1495.