- EUR/USD keeps holding on above the 1.1200 handle.
- EMU headline CPI surprised to the upside in June.
- US Housing Starts disappointed expectations last month.
The shared currency manages to keep the buying interest intact so far today, with EUR/USD navigating the area above the 1.1200 handle for the time being.
EUR/USD firmer on steady greenback
EUR met dip-buyers in the 1.1200 neighbourhood, or weekly lows, although gains appear so far limited around the 1.1280 region, area coincident with the 21-day SMA.
The European currency has also derived upside pressure after final headline consumer prices in Euroland for the month of June came in a tad higher than the preliminary readings, rising 0.2% inter-month and 1.3% from a year earlier. The Core reading, however, matched previous prints at 1.1%.
Somewhat collaborating with today’s tepid recovery, US Housing Starts and Building Permits disappointed expectations during last month, putting the greenback under some downside pressure.
What to look for around EUR
The inability of the pair to clear the important resistance area in 1.1280/90 has encouraged sellers to return to the markets, triggering the ongoing leg lower. Furthermore, occasional bullish attempts in spot should be seen as a short-lived against the backdrop of renewed and increasing speculations of another wave of monetary stimulus from the European Central Bank in the near term, via interest rate cuts (July/September), the resumption of the QE programme and changes in the forward guidance. Also weighing on the currency, the dovish stance from the ECB appears reinforced by the recent appointment of ex-IMF’s C.Lagarde to succeed M.Draghi. On the macro scenario, the slowdown in the region looks unremitting and it also reinforces the current accommodative attitude of the central bank.
EUR/USD levels to watch
At the moment, the pair is up 0.07% at 1.1217 and a break above 1.1286 (high Jul.11) would target 1.1320 (200-day SMA) en route to 1.1412 (high Jun.25). On the downside, the next support emerges at 1.1193 (monthly low Jul.9) followed by 1.1181 (low Jun.18) and finally 1.1106 (2019 low May 23).
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