- EUR/USD reverses the recent downside and retests 1.0450.
- The greenback looks offered following Monday’s US holiday.
- Final June Services PMIs are due in the euro area.
The single currency leaves behind part of the recent weakness and lifts EUR/USD to the area of 1.0450, where some initial resistance turns up.
EUR/USD up on risk appetite
EUR/USD manages to regain some composure and posts decent gains after two consecutive daily pullbacks on Tuesday.
The uptick in the pair comes on the back of the renewed buying interest in the risk complex, which at the same time is reinforced by higher US yields vs. some mild downside seen in the German 10y bund yields.
Price action around the shared currency is also seen within a range bound theme in the next session ahead of the release of the ECB Accounts on Thursday and key US data at the end of the week.
In the domestic docket, the final Services PMIs for the month of June are due, whereas Factory Orders will take centre stage across the pond later in the session.
What to look for around EUR
EUR/USD remains under pressure and still unable to gather serious upside traction, another proof that sellers remain well in control of the sentiment surrounding the European currency for the time being.
Indeed, the pair is still far away from exiting the woods and it is expected to remain at the mercy of dollar dynamics, geopolitical concerns, fragmentation worries and the Fed-ECB divergence.
Among positives for the euro can be found, however, in higher German yields, persistent elevated inflation in the euro area and a decent pace of the economic recovery in the region. Collaborating with this view also appears the generalized hawkish chatter around ECB’s rate-setters.
Key events in the euro area this week: Germany, EMU Final Services PMI (Tuesday) – Germany Construction PMI, EMU Retail Sales (Wednesday) – ECB Accounts (Thursday) – ECB Lagarde (Friday).
Eminent issues on the back boiler: Fragmentation risks. Kickstart of the ECB hiking cycle in July? Asymmetric economic recovery post-pandemic in the euro bloc. Impact of the war in Ukraine on the region’s growth prospects and inflation.
EUR/USD levels to watch
So far, spot is gaining 0.13% at 1.0431 and a break above 1.0615 (weekly high June 27) would target 1.0773 (monthly high June 9) en route to 1.0786 (monthly high May 30). On the other hand, immediate contention emerges at 1.0382 (weekly low June 30) seconded by 1.0358 (monthly low June 15) and finally 1.0348 (2022 low May 13).
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.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.