EUR/USD retreats below 1.1300 but still could post its first monthly gain

• Euro drops modestly on Thursday against US dollar amid geopolitical concerns. 
• EUR/USD back away from 1.1345, finds support at 1.1265.

The EUR/USD pair bottomed earlier today at 1.1267, the lowest level in six days and then slowly recovered until it found resistance at the 1.1285 area. As of writing, trades at 1.1275, marginally lower for the day and 65 pips below the weekly highs. 

The US Dollar posted mix results amid trade tensions and geopolitical concerns. Recently  US Secretary of State Pompeo said Iran is responsible for the attacks today on two oil tankers in the Gulf of Oman. Those concerns helped the greenback that remains weak amid rising expectations of an interest rate cut from the Fed as soon as July. 

The pair continues to retreat after being unable to break above 1.1345/50. On Friday, geopolitical developments will likely continue to be a key driver while traders will also look at US data (retail sales and industrial production). 

EUR/USD holds above 2019 lows, with positive bias 

The Euro is up in June against the US Dollar on its way to the first monthly gain of the year. The bullish bias on the daily chart remains in place, even as the positive momentum eased. 

“In our view, the Fed has blinked and rate cuts are coming from July. At the same time, the ECB lacks answers on what to do about the risk of a de-anchoring of inflation expectations. The Fed-ECB monetary policy divergence should pave the way for a higher EUR/USD over the coming 6M. We forecast EUR/USD at 1.14 in 1M and 1.15 (revised up from 1.13) in 3M,” mentioned Danske Bank analysts. 

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