EUR/USD eyes consecutive monthly gains for first since January 2018
|- EUR/USD looks set to confirm its first two-month winning run since January 2018.
- Upbeat China supports gains in risk assets and EUR/USD.
- Monday's above-forecast US housing data could continue to cap the upside in EUR/USD.
EUR/USD appears on track to close June on a positive note, having jumped by over 1.3% in May.
At press time, the pair is trading at 1.1242, representing a 1.27% rise on a month-to-date basis. If the uptick is held through Tuesday’s GMT close, a monthly gain would be confirmed.
The resulting two-month winning streak would be the longest in at least 1-½ years. The single currency had posted gains for three straight months, starting from November 2017 to January 2018.
The latest two-month rally could be associated with the risk reset in the global equity markets and the resulting weakening of haven demand for the US dollar. The S&P 500, Wall Street’s equity index and benchmark for global stock markets, rose by 4.5% in May and printed four-month highs above $3,200 earlier this month.
As for Tuesday, EUR/USD looks set to consolidate, courtesy of offsetting factors. The upbeat China manufacturing purchasing managers’ index (PMI) released early Tuesday could keep the global equities better bid and reduce the haven demand for the US dollar.
However, the dollar may continue to draw bids on the back of the better-than-expected US housing data released Monday. After all, the greenback held ground in Asia despite the overnight rally on Wall Street. As such, the upside in EUR/USD looks limited.
On the data front, the Eurozone preliminary inflation number for June is scheduled for release at 09:00 GMT, following which, the focus would shift to US Consumer Confidence figure and ECB’s De Guidones speech, due at 15:00 GMT. Also, Federal Reserve’s chairman Powell and Treasury Secretary Mnuchin are slated to testify before Congress.
Technical levels
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