EUR/USD is defending the immediate support of 1.0700 amid a climate of risk appetite.
The ECB is expected to keep interest rates unchanged this month due to a weak economy and falling inflation.
The EUR/USD pair is trading in a symmetrical triangle chart pattern, indicating a decrease in volatility.
The EUR/USD pair was able to protect the support at the 1.0700 round level on Monday. Overall, the major currency pair fought for a decisive move as investors await the data on the US Consumer Price Index (CPI) for August, due to be released on Wednesday at 12:30 GMT .
The S&P500 opened strongly amid a bullish market environment, as investors focused on the context that the Federal Reserve (Fed) will not raise interest rates for the rest of the year. The Dollar Index remains under pressure following a nominal improvement in China’s inflation.
In the Eurozone, investors remain uncertain about the European Central Bank’s (ECB) interest rate decision for monetary policy in September. According to Commerzbank analysts, the majority of ECB board members are likely to vote in favor of keeping the official interest rate unchanged due to the weakness of the economy and the low trend of the inflation rate.
The EUR/USD pair is trading in a symmetrical triangle chart pattern on an hourly scale, indicating a compression of volatility. The downtrend line is drawn from the September 6 high of 1.0749, while the uptrend line is drawn from the September 7 low of 1.0686.
The shared currency pair remained close to the 20-period exponential moving average (EMA) at 1.0725 for the last three trading sessions, showing sideways behavior.
Meanwhile, the Relative Strength Index (RSI) (14) ranges between 40.00-60.00, which shows a non-directional behavior pending US inflation data.
If the pair surpasses the neutral triangle reached on September 8 at 1.0744, a new uptrend will occur. A decisive breakout will send the major currencies to horizontal resistances taken from the September 4 high of 1.0809 and the September 1 high of 1.0882.
In an alternative scenario, a break below the September 7 low of 1.0686 would expose the May asset low of 1.0635. A drop below will later reveal the asset’s support at the 1.0600 round.
