Euro flat after losing early gains on Monday

EUR/USD trades lower near the 1.1370 area on Monday, surrendering earlier gains as investors remain cautious ahead of key Eurozone growth figures and the Federal Reserve’s (Fed) monetary policy decision.

Improved global risk sentiment follows a pause in hostilities between the United States and Iran, which triggered a sharp decline in Oil prices and a rally across stock and bond markets. West Texas Intermediate (WTI) Oil trades near $83.60 per barrel, falling more than 7% as concerns over supply disruptions ease.

Investors now await preliminary second-quarter Gross Domestic Product data from Germany and the broader Eurozone. Eurozone GDP is expected to expand 0.2% QoQ after contracting 0.2% previously, while annual growth is forecast to accelerate to 0.4% from 0.3%.

Germany’s economy is expected to stagnate quarterly following a 0.3% expansion, although annual GDP growth is projected to rise to 0.6% from 0.4%. Weaker-than-expected figures could reinforce concerns about the region’s economic outlook and place additional pressure on the Euro.

Germany’s preliminary July Consumer Price Index (CPI) will also be closely watched. Monthly inflation is expected to rise 0.7% after declining 0.3%, while annual inflation previously stood at 2.3%. Stronger price pressure could support expectations that the European Central Bank will maintain a restrictive stance, supporting the Euro.

Short-term technical analysis:

On the 4-hour chart, EUR/USD trades at 1.1372, holding a bearish near-term bias as the pair remains capped beneath the 20-period Simple Moving Average (SMA) around 1.1391 and the 100-period SMA near 1.1420. Momentum is subdued with the 14-period Relative Strength Index (RSI) hovering at 41, which suggests weak buying interest and keeps the focus on the downside while the pair stays under this layered moving-average resistance.

On the topside, initial resistance is aligned at 1.1375, followed by 1.1386 and then a denser barrier around 1.1391, where a horizontal level coincides with the 20-period SMA, before the 100-period SMA at 1.1420 comes into play. On the downside, the immediate support is seen at 1.1369; a clear break below this floor would open the door to an extension of the current bearish phase, while holding above it would merely keep the pair in a corrective consolidation beneath the cited resistance cluster.