EUR/USD loses the grip above 1.1400, focus on Powell

The bid tone around the shared currency stays well and sound in the first half of the week, pushing EUR/USD to fresh tops beyond 1.1400 the figure.

EUR/USD looks to risk trends, geopolitics, Fed

The pair is advancing uninterruptedly since Wednesday on the back of the strong sell-off in the greenback, which in turn has been fuelled by rising speculations of rate cuts by the Fed in the near term. In fact, market chatter continues to price in an ‘insurance cut’ at the July meeting, while the debate has now shifted to the size of such a cut (25 bps? 50 bps?).

In the meantime, geopolitical effervescence around US and Iran plus US-China trade tensions remain the key driver for the risk-appetite trends, all following recent US sanctions and ahead of the key G-20 event in Japan on June 28-29.

Later in the session, the speech by Chief Powell on economic outlook and monetary policy is expected to shed further details on the potential rate cuts, while further Fed-speakers should also be in the limelight.

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 gaining 0.02% at 1.1400 and a surpass of 1.1412 (high Jun.25) would target 1.1419 (high Feb.28) en route to 1.1448 (monthly high Mar.20). On the other hand, the next support emerges at 1.1349 (200-day SMA) followed by 1.1259 (100-day SMA) and finally 1.1181 (low Jun.18).