EUR/USD Price Forecast: Eyes further upside towards 1.1620

The Euro (EUR) continues to trade gently against the US Dollar (USD) at around 1.1550 during the early European trading hours on Monday. The EUR/USD pair slips lower as the US Dollar gains ground following a notable drop on Friday. At the moment, the US Dollar Index (DXY), which measures the Greenback’s strength against six major currencies, experiences a 0.12% increase, nearing 99.72.

The US Dollar plummeted sharply on Friday following the release of the disappointing U.S. Nonfarm Payrolls (NFP) data for July. This data revealed that employers had cut 23K jobs, while economists had predicted the creation of 80K additional positions. According to the CME FedWatch tool, the likelihood of the Federal Reserve raising interest rates during the September meeting has dropped to 46%, a significant decline from 67% reported a week earlier.

Meanwhile, investors eagerly anticipate the U.S. Consumer Price Index (CPI) data for July, set to be released on Wednesday. The EUR/USD pair trades modestly lower at approximately 1.1550, yet retains a bullish outlook for the near term, as the price remains above the 20-day Exponential Moving Average (EMA) at 1.1484, indicating that the recent uptrend is backed by underlying demand.

The Relative Strength Index (RSI) appears to stabilize near the 60.00 level, signaling potential fresh bullish momentum. On the downside, initial support is found near the August 3 low at 1.1500, followed by the 20-day EMA at 1.1484. If the pair fails to maintain the 20-day EMA, the July 28 low at 1.1353 could be reached. Should the pair surpass Friday's high at 1.1581, it could continue its upward trajectory towards the June 15 high at 1.1622.