EUR/USD remains sidelined around 1.1360, ignores US data
|- EUR/USD navigates within the familiar range around 1.1360.
- Cautious trade expected to prevail ahead of G-20 event.
- US Durable Goods Orders contracted 1.3% MoM in May.
EUR/USD alternates gains with losses in the middle of the week, entering into a consolidative/cautious theme near the 1.1360 region and ahead of the G-20 meeting.
EUR/USD faces further consolidation
Spot trades without a clear direction so far today following Tuesday’s bearish ‘outside day’ and despite the improved mood in the risk-associated complex.
The pair shed part of its weekly gains and has receded from levels beyond 1.1400 the figure – or 3-month peaks – recorded yesterday in response to a pick up in the demand for the buck. In this regard, the rebound in yields of the US 10-year reference is putting the Japanese safe haven under downside pressure, lifting USD/JPY to new weekly highs.
Earlier in the day, the German Consumer Confidence tracked by GfK eased to 9.8 for the month of July, confirming the downbeat momentum in the German economy. Across the Atlantic, Durable Goods Orders contracted at a monthly 1.3% during May and advanced trade figures showed the deficit widened to $74.55 billion in May.
What to look for around EUR
The renewed dovish stance from the ECB and USD-dynamics should dictate the price action around the pair in the near term, helped at the same time by the broad risk-appetite trends and trade tensions. Further out, the slowdown in the region looks unremitting and reinforces at the same time the current dovish attitude of the central bank. On the political front, Italian politics is expected to remain a source of uncertainty and volatility for EUR, with the centre of the debate gyrating around the country’s opposition to EU fiscal rules as well as the challenging tone from LN’s M.Salvini.
EUR/USD levels to watch
At the moment, the pair is retreating 0.05% at 1.1360 and faces the next down barrier at 1.1344 (low Jun.25) followed by 1.1259 (100-day SMA) and finally 1.1181 (low Jun.18). On the flip side, a break above 1.1412 (high Jun.25) would target 1.1419 (high Feb.28) en route to 1.1448 (monthly high Mar.20).
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