EUR/USD Price Forecast: Holds above 1.1150, the constructive outlook remains intact.

EUR/USD strengthens near 1.1055 in Monday’s early European session.
The pair maintains the positive view above the key 100-day EMA, but RSI indicator shows the neutral momentum.
The first upside barrier emerges at 1.1185; the crucial support level is seen at 1.1000.

The EUR/USD pair trades with mild gains around 1.1055, snapping the three-day losing streak during the early European session on Monday. The dovish stance of the US Federal Reserve (Fed) undermines the Greenback and provides some support to EUR/USD.

Financial markets are now pricing in a nearly 70% odds of a 25 basis points (bps) rate cut by the Fed in September, while the chance of a 50 bps reduction stands at 30%, according to the CME FedWatch tool. The attention will shift to the US employment data on Friday for further insights about the potential rate cuts in September.

Technically, the bullish outlook of EUR/USD remains intact as the major pair holds above the key 100-day Exponential Moving Averages (EMA) on the daily timeframe. Nonetheless, further consolidation cannot be ruled out as the 14-day Relative Strength Index (RSI) hovers around the midline, suggesting the neutral momentum of the trend.

The immediate resistance level for the major pair emerges at 1.1185, the high of August 28. Further north, the next hurdle is seen at the upper boundary of the Bollinger Band at 1.1230. A decisive break above this level will see a rally to 1.1275, the high of July 18.

In the bearish event, the potential downside support level is located at the 1.1000 psychological mark. A breach of this level will see a drop to 1.0950, the low of August 15. The additional downside filter to watch is near the 100-day EMA at 1.0893, followed by the lower limit of the Bollinger Band at 1.0863.

What is the Euro?

The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).