EUR/USD dips to fresh lows near 1.1730, rebounds afterwards ahead of Powell
|- EUR/USD loses the grip and re-tests the 1.1730 area.
- No surprises from the US PCE readings in July.
- Powell speaks later on “The Economic Outlook”.
A fresh bout of dollar strength sent EUR/USD to new daily highs in the 1.1730 area at the end of the week, just to bounce soon afterwards.
EUR/USD focused on Powell
EUR/USD briefly returned to the negative ground after failing once again to surpass the upper end of the weekly range in the 1.1770/80 band.
The knee-jerk in spot came after FOMC’s L.Mester said she sees the probability of start the tapering talks as soon as in the next month, adding at the same time that the economy looks closer to the “substantial progress”. R.Kaplan, in the meantime, said that inflation could gyrate around 2.5% in 2022, although risks remain to the upside, also opening the door to a sooner-than-anticipated QE tapering. Finally, Atlanta Fed R.Bostic said the Fed can trim the bond-purchase programme at a faster pace than in previous years, as the economy looks stronger.
In the US data space, headline PCE and Core PCE rose at an annualized 4.2% and 3.6%, respectively, in July. Further results for the month of July saw the trade deficit at $86.38 billion and Personal Income and Personal Spending expanding 1.1% MoM and 0.3% MoM, respectively.
EUR/USD levels to watch
So far, spot is gaining 0.11% at 1.1762 and faces the next up barrier at 1.1804 (weekly high Aug.13) followed by 1.1830 (55-day SMA) and finally 1.1908 (monthly high Jul.30). On the downside, a break below 1.1663 (2021 low Aug.20) would target 1.1612 (monthly low Oct.20 2020) en route to 1.1602 (monthly low Nov.4 2020).
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.