The common currency appreciated last week and has settled above the 1.13 threshold after a short-lived jump to a high of 1.1370 earlier in the week. The recent rally seems to have stalled, while the current recovery attempts look too modest at this stage.
Despite the risk-on sentiment across the board, EUR/USD fails to show a sustainable rally. Such dynamics shows that the worries over the euro zone economy continue to weight prices and drive the euro appeal lower. At the same time, the Federal Reserve seems to be ready to resume hiking rates this year even though the central bank decided to make a dovish shift citing global and local risks.
A stiff resistance at 1.1370 and the overall downtrend that remains intact suggest the pair is headed lower in the days to come. So the risk of breaking below 1.13 remains, with the first target lies at 1.1275. Despite the bearish risks seem to be abating on the short term, the upside potential remains limited at this stage, and the technical picture could improve provided that the greenback will lose ground across the board.