EUR/USD treads water around 1.2200, looks to data, ECB
|- EUR/USD keeps the tight range around 1.2200.
- ECB’s Lagarde will take centre stage later in the session.
- US Core PCE, Biden’s Budget will be in the limelight later.
EUR/USD extends the side-lined theme around the 1.2200 neighbourhood at the end of the week.
EUR/USD now looks to ECB, US data
EUR/USD now alternates gains with losses around the 1.2200 area after testing once again the key support in the 1.2170 region earlier in the session.
The rangebound theme in spot follows the broader consolidation in the global markets against the backdrop of the pick-up in yields on both sides of the Atlantic. In fact, yields of the US 10-year note manage to surpass the 1.60% level, while yields of the German 10-year Bund rebound to -0.16%.
Later in the session, ECB’s President C.Lagarde and Board member F.Panetta will participate in the virtual G7 Finance Ministers and Central Bank Governor’s event. In addition, Board member A.Enria will participate in an online seminar.
In the euro docket, the final Consumer Confidence tracked by the European Commission came in at -5.1 for the current month.
Across the pond, investors will closely follow the release of inflation figures measured by the PCE along with Personal Income/Spending and the final May’s Consumer Sentiment by the U-Mich index.
Markets’ attention will also be on the announcement of the multi-trillion budget by President Biden, with infrastructure and families in the centre of the debate.
What to look for around EUR
EUR/USD recorded new 4-month highs near 1.2270 earlier in the week before coming under some selling pressure to the 1.2200 neighbourhood. The move higher remains largely underpinned by the improved sentiment in the risk appetite and the persistent sell-off in the greenback amidst rising optimism on the recovery in the euro area, which appears in turn supported by the firmer pace of the vaccine rollout. In addition, better-than-expected key fundamentals pari passu with the surging morale in the bloc also props up the upbeat mood surrounding the pair.
Key events in the euro area this week: ECB C.Lagarde (Friday).
Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the vaccine rollout. Probable political effervescence around the EU Recovery Fund. German elections.
EUR/USD levels to watch
So far, spot is gaining 0.03% at 1.2196 and faces the next hurdle at 1.2266 (monthly high May 25) followed by 1.2300 (round level) and finally 1.2349 (2021 high Jan.6). On the flip side, a break below 1.2051 (weekly low May 13) would target 1.1985 (monthly low May 5) en route to 1.1970 (200-day SMA).
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.