• EUR/USD edges up to near 1.1600 while its outlook remains uncertain.
• The ECB is expected to talk a lot about raising interest rates in the policy meeting next week.
• Investors await the US NFP data for May.

The EUR/USD pair trades marginally higher to near 1.1600 during the early European trading session on Thursday. The major currency pair edges up, but is close to its Wednesday’s low, suggesting that the outlook is still uncertain.

The Euro is broadly under pressure as higher energy prices due to the Middle East crisis have diminished the appeal of currencies from economies that rely heavily on oil imports to meet its energy needs.

On the monetary policy, investors are mixed regarding whether the European Central Bank (ECB) will raise interest rates in the policy meeting; however, they are very likely to discuss heavily on tightening monetary conditions due to higher inflationary pressures.

In May, the headline and the core Harmonized Index of Consumer Prices (HICP) arrived higher at 3.2% and 2.5% Year-on-Year (YoY), respectively.

Meanwhile, the US Dollar Index (DXY) ticks down to near 99.45, but is still close to its over eight-week high of 99.55. The DXY is broadly firm amid the United States (US) and Iran are struggling to reach a deal. Going forward, investors will focus on the US Nonfarm Payrolls (NFP) data for May, which will be released on Friday.

EUR/USD technical analysis

EUR/USD ticks higher at around 1.1600 at press time. However, the near-term tone of the pair remains bearish as it holds below the 20-day exponential moving average (EMA) at 1.1646.

The Relative Strength Index (RSI) around 43 leans to the downside, suggesting sellers retain control despite the recent stabilization in price.

On the topside, initial resistance sits at the 20-day EMA near 1.1646, and a daily close above this barrier would be needed to ease the immediate downward pressure. Looking down, the pair could slide to 1.1500 if it drops below the May 21 low at 1.1576.

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