EUR/USD reaches 2-day highs around 1.1850 ahead of Powell, US data


  • EUR/USD adds to Wednesday’s gains and retakes 1.1850.
  • The dollar stays offered following Powell’s remarks.
  • US Initial Claims, Powell’s second testimony next on tap.

The upside momentum in the European currency remains well and sound and now pushes EUR/USD back to the mid-1.1800s, or fresh 2-day highs, on Thursday.

EUR/USD focused on US docket

EUR/USD gains around a cent after rebounding from weekly lows in the 1.1770 region recorded in past hours.

The improvement in both spot and the risk complex in general comes on the back of the renewed offered bias in the buck, sparked after Wednesday’s dovish remarks from Chief Powell before his first semiannual testimony to the Congress.

Also weighing on the dollar, yields of the US 10-year reference resume the downside and target the 1.30% area, while yields of the German 10-year Bund flirt with recent lows around -0.34%.

In the meantime, risk appetite trends appear somewhat side-lined after GDP figures showed the Chinese economy expanded at an annualized 7.9% during the April-June period, a tad below consensus.

Nothing to write home about regarding the euro docket, while all the attention will be on the data releases in the US calendar: Initial Claims, the Philly Fed Index, the NY Empire State Index and Industrial/Manufacturing Production. In addition, Powell will once again testify to the Congress, this time before the Committee on Banking, Housing and Urban Affairs.

What to look for around EUR

EUR/USD’s recovery challenges the 1.1850 area following the drop to new lows near 1.1770 earlier in the week. Price action around spot, in the meantime, is expected to exclusively hinge on dollar dynamics, particularly as investors continue to adjust to the Fed’s hawkish message, prospects of higher inflation in the US and potential QE tapering earlier than anticipated. On the euro side of the equation, support for the European currency in the form of auspicious results from fundamentals in the bloc now appears somewhat mitigated considering recent data, although the investors’ morale remains high amidst the persistent optimism surrounding a strong rebound in the economic activity in the second half of the year.

Key events in the euro area this week: EMU Final June CPI (Friday).

Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the Delta variant of the coronavirus and pace of the vaccination campaign. Probable political effervescence around the EU Recovery Fund. German elections. Investors’ shift to European equities in the wake of the pandemic.

EUR/USD levels to watch

So far, spot is gaining 0.08% at 1.1843 and faces the next hurdle at 1.1895 (weekly high Jul.6) followed by 1.1975 (weekly high Jun.25) and finally 1.2002 (200-day SMA). On the flip side, a breakdown of 1.1771 (monthly low Jul.14) would target 1.1762 (78.6% Fibo of the November-January rally) and route to 1.1704 (2021 low Mar.31).

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD retreats below 1.1300 area as NFP-inspired dollar weakness fades

EUR/USD jumped to a daily high of 1.1333 with the initial market reaction to the disappointing November Nonfarm Payrolls data but quickly returned below 1.1300. Rising US Treasury bond yields seem to be helping the dollar stay resilient against its major rivals. 

EUR/USD News

GBP/USDdrops to 1.3250 area as dollar regains strength

GBP/USD spiked above 1.3300 in the early American session with the initial market reaction to the gloomy US November jobs report. However, the greenback regathered strength on hawkish Fed commentary and forced the pair to turn south.

GBP/USD News

Gold struggles to capitalize on weak NFP data, holds near $1,770

Gold spiked to a daily high near $1,780 with the initial market reaction to the disappointing Nonfarm Payrolls data from the US but seems to be having a difficult time preserving its bullish momentum with the 10-year US T-bond yield staying resilient.

Gold News

The bull and the bear case for BTC

Bitcoin price saw a bullish impulse that faced massive headwinds before it tagged a crucial psychological barrier. Bitcoin is likely to experience massive volatility as the situation resolves over time. 

Read more

Cyber Monday 2021 Discounts!

Glued to your trading screen on Cyber Monday? Upgrade your skills by signing up for FXStreet’s Premium service, offered at a discount of up to 50%. Fellow traders have already taken advantage of Black Friday profits. What about you? 

Subscribe now!

Forex MAJORS

Cryptocurrencies

Signatures