EUR/USD appears offered near 1.0220 prior to Payrolls
|- EUR/USD loses the grip and slips back to the 1.0220 region.
- Industrial Production in Italy surprised to the downside in June.
- The NFP is expected at 250K jobs in July.
Sellers seem to have regain the initiative around the single currency and drag EUR/USD back to the low-1.0200s at the end of the week.
EUR/USD focuses on US data
EUR/USD resumes the downside and trims part of Thursday’s noticeable advance on the back of the renewed buying interest around the greenback, while yields on both sides of the ocean remain depressed so far.
Indeed, the appetite for the risk-associated assets appears somewhat subdued on Friday, as usual cautiousness pre-NFP dominates the sentiment among market participants.
In the domestic data space, Italian Industrial Production contracted 2.1% MoM in June and 1.2% from a year earlier. In France, the Industrial Production expanded 1.4% MoM also in June and the trade deficit widened to €13.7B in the same month.
Other than the monthly labour market report, the US docket will include the Consumer Credit Change figures for the month of June and the speech by Richmond Fed T.Barkin.
What to look for around EUR
EUR/USD remains within a choppy range this week ahead of the key release of US Nonfarm Payrolls for the month of July.
Price action around the European currency, in the meantime, is expected to closely follow dollar dynamics, geopolitical concerns, fragmentation worries and the Fed-ECB divergence.
On the negatives for the single currency emerges the so far increasing speculation of a potential recession in the region, which looks propped up by dwindling sentiment readings among investors and the renewed downtrend in some fundamentals.
Eminent issues on the back boiler: Continuation of the ECB hiking cycle. Italian elections in late September. Fragmentation risks amidst the ECB’s normalization of monetary conditions. Impact of the war in Ukraine on the region’s growth prospects and inflation.
EUR/USD levels to watch
So far, spot is retreating 0.16% at 1.0228 and faces the next contention at 1.0096 (weekly low July 26) followed by 1.0000 (psychological level) and finally 0.9952 (2022 low July 14). On the other hand, the break above 1.0293 (monthly high August 2) would target 1.0404 (55-day SMA) en route to 1.0615 (weekly high June 27).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.