EUR/USD has limited room to rise as downtrend resistance looms

• The EUR/USD is trading within well-known ranges.
• US Retail Sales and concerns about trade top the agenda.
• The technical picture is slightly bearish for the pair.

The EUR/USD is trading around the round level of 1.1700, well within ranges seen in recent weeks. Traders are gradually moving on from France’s win of the World Cup in Russia to market-moving events. Russian President Vladimir Putin will meet his American counterpart Donald Trump in Helsinki. Ukraine, Syria, sanctions, and trade are on the agenda.

Ahead of the encounter, President Trump described the European Union as a “foe” and cited competition on trade. The President of the European Council Donald Tusk warned that conflicts about trade could turn into “hot conflicts”. The recent NATO Summit in Brussels showcased the growing rift between the US and its European allies.

Markets remain relatively calm amid the rhetoric, but things may change in favor of the US Dollar. Any deterioration in trade relations has favored the US Dollar in the past week.

The US will publish its monthly retail sales for June later in the day. The US economy is focused around consumption and the publication always moves the markets. The report for May came out above expectations and sent the greenback soaring. All the figures for June are projected to be positive, but not as robust as last time. The publication also feeds into Q2 GDP.

EUR/USD Technical Analysis

The EUR/USD is trading below downtrend resistance which begins from the 1.1795 peak and has touched the price on three occasions, making it a significant line. The line still holds at the moment. A break higher would be a bullish sign.

The Relative Strength Index is steady around 50, while Momentum is slightly negative. The 50 and 200 Simple Moving Averages on the 4-hour chart are close to each other and to the price, thus not providing any specific guidance.

Looking down, 1.11665 provided support to the pair on July 11th. It is followed by 1.1630 which was a swing low on July 4th, and 1.1590 which supported the pair on July 2nd. The 2018 trough of 1.1508 is the next level to watch.

Looking up, 1.1720 capped the pair in early July and also in late June. The aforementioned 1.1795 is a strong line to the upside, and the last level to watch is 1.1850, the June 14th swing high.

More: EUR/USD has its technical battle lines clearly drawn – Confluence Detector