Euro elevates as Sentix confidence and ECB decision take center stage

• Eurozone Sentix Investor Confidence improved modestly in June.
• Markets expect the ECB to hike interest rates on Thursday as inflation remains elevated.
• Investors will be on the lookout for clues in Lagarde's comments about the ECB's future policy path.

The EUR/USD pair trades near 1.1540 on Monday as investors assess mixed Eurozone sentiment data and position ahead of the European Central Bank's (ECB) highly anticipated interest rate decision later this week.

Eurozone investor confidence improved in June, with the latest Sentix Investor Confidence index rising to -13.4 from -16.4 previously. Although the indicator remains in negative territory, the improvement suggests investor sentiment is becoming less pessimistic, offering modest support to the Euro.

Attention now turns to Thursday's ECB policy announcement, where markets expect policymakers to deliver another interest-rate hike as inflation remains above the central bank's target. Investors will closely monitor comments from Christine Lagarde for guidance on whether additional tightening could be required in the coming months.

Short-term technical analysis:

On the 4-hour chart, EUR/USD trades at 1.1540, retaining a bearish near-term bias as it remains below both the 20-period Simple Moving Average (SMA) at 1.1587 and the 100-period SMA at 1.1621. The pair is attempting to stabilize just above short-term support, while the Relative Strength Index (RSI) near 38 hints at lingering downside pressure but shy of oversold conditions, suggesting scope for further weakness if nearby resistance levels cap the upside.

On the topside, initial resistance emerges at 1.1544, followed by 1.1555; a sustained break above these levels would be needed to ease immediate selling pressure and expose the 20-period SMA at 1.1587 and then the 100-period SMA at 1.1621. On the downside, first support is seen at 1.1533, ahead of the lower horizontal floor at 1.1516, where a clear violation would likely reinforce the broader bearish tone and open the door to a deeper decline.

(The technical analysis of this story was written with the help of an AI tool.)