EUR/USD: Sintra forum in focus - OCBC

Euro (EUR) extended its run higher towards 1.18-handle briefly this morning as USD loses ground broadly. Pair was last at 1.1795 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Bullish momentum on daily chart intact

"Overnight, it was reported that EU is willing to accept a trade arrangement with the US that includes a 10% tariff amongst other components. In return, EU wants the US to commit to lower rates on key sectors such as pharmaceuticals, alcohol, semiconductors and commercial aircraft. We continue to watch developments that may unfold ahead of 9 July."

"ECB Forum in Sintra (30 June - 2 July) is a key event to watch, with highlight on a powerhouse panel session tonight (930pm SGT), when Fed's Powell, BoJ's Ueda, ECB's Lagarde, BoE's Bailey and BoK's Rhee will participate in. Central bankers may share insights or even paint guidance with regards to economy and monetary policies amidst market uncertainty. Historically, the Sintra Forum has been a stage for market-moving signals."

"Back in 2017, the then-ECB president Draghi used the forum to highlight reflationary pressures in the Eurozone, which helped push the euro higher. In 2019, he hinted at further monetary stimulus, leading to a weaker euro. Given this track record, we will be watching this year's panel closely for any clues. Bullish momentum on daily chart intact while RSI rose into overbought conditions. Next resistance at 1.1820 levels, before 1.1920 levels. Support at 1.1630, 1.1550 (21 DMA)."