EURUSD has formed higher lows and higher highs to create an ascending trend channel on its 1-hour time frame. Price is testing the resistance and could be due for a pullback to the nearby support levels.
Using the Fibonacci retracement tool shows that the 61.8% level is closest to the channel support around the 1.1275 major psychological mark. The 50% level coincides with the 200 SMA around the 1.1300 mark. The 38.2% level is in line with the mid-channel area of interest. If any of these levels hold as support, price could recover to the swing high or the channel top closer to the 1.1450 minor psychological mark.
RSI is turning lower to show that selling pressure is in play, and the oscillator has some room to go before reaching the oversold region to reflect exhaustion. Stochastic is also moving down to show that bearish pressure is in play. This oscillator also has room to move lower so price might follow suit.
There are no major reports due from the euro zone this week, except perhaps the flash CPI readings later in the week. The headline reading is slated to hold steady at 1.2% while the core version of the report could climb from 0.8% to 1.0%.
Another factor that could impact both euro and dollar price action is the G20 Summit. In particular, traders are keeping tabs on the Trump-Xi meeting and how it could influence current and future tariffs.
Any indication that both leaders are conciliatory and willing to compromise instead of imposing more retaliatory measures could be positive for the dollar. There have been reports that the countries are agreeing to a tentative truce ahead of the G20 meeting, which could set the tone for a positive outcome or at least upbeat expectations.