• EUR/USD alternates gains with losses below 1.1800.
  • The ECB’s PEPP, forward guidance takes centre stage later.
  • US Initial Claims will be in the limelight later in the NA session.

The single currency trades in a volatile fashion on ECB-day and motivates EUR/USD to gyrate around the 1.1780 region so far on Thursday.

EUR/USD focused on the ECB

EUR/USD struggles for direction following Wednesday’s decent advance, although a convincing break above 1.18 the figure still remains elusive for EUR-bulls.

Indeed, spot managed to regain some composure after bottoming out in fresh multi-month lows in the mid-1.1700s on Wednesday, always on the back of the resumption of the demand for riskier assets.

Later in the session, the ECB is expected to leave rates unchanged at its meeting, although the gathering has been growing in importance as of late after officials hinted at the possibility of a revision to the bank’s forward guidance and the current PEPP.

Data wise in the bloc, France’s Business Confidence improved to 110 in July (from 108). Other than the ECB gathering, the European Commission will release its preliminary gauge of the Consumer Confidence in the region for the current month.

In the US calendar, Initial Claims are due followed by the Chicago Fed Index, Existing Home Sales and the CB’s Leading Index for the month of June.

What to look for around EUR

EUR/USD managed well to leave behind recent lows near 1.1750, although the outlook remains fragile. As usual in past weeks, price action around the pair 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, recent results from key fundamentals hinted at the idea that the recovery could have stalled or lost some momentum, casting some doubts over the growth prospects into the second half of the year. In addition, the dovish stance from the ECB could well be re-affirmed or even intensified later, which carries the potential to keep the euro well under pressure for the time being.

Key events in the euro area this week: ECB meeting, EMU Flash Consumer Confidence (Thursday) – EMU advanced PMIs (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 0.04% at 1.1795 and faces the next up barrier 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 1.1751 (monthly low Jul.21) would target 1.1704 (2021 low Mar.31) en route to 1.1602 (November 2020 low).

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 Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD holds higher ground near 1.0200 amid upbeat mood

EUR/USD holds higher ground near 1.0200 amid upbeat mood

EUR/USD is trading close to 1.0200 after the Eurozone Sentix data improved slightly in August. The US dollar pares strong NFP-inspired gains amid risk-on flows. Moody’s cut Italy’s credit rating amid political jitters. US-China tensions over Taiwan loom.

EUR/USD News

GBP/USD clings to gains below 1.2100 amid USD retreat

GBP/USD clings to gains below 1.2100 amid USD retreat

GBP/USD is holding onto the recovery gains below 1.2100, supported by a weaker US dollar amid a positive shift in risk sentiment. Bumper US NFP data ramped up aggressive Fed tightening expectations. UK political woes and a dovish BOE rate hike could cap the pound's upside. 

GBP/USD News

Gold needs to crack $1,763 to extend the downside

Gold needs to crack $1,763 to extend the downside

Gold price nurses losses after impressive US NFP-inspired sell-off. US dollar eases in tandem with the Treasury yields amid a better mood. XAU/USD looks south towards $1,750, as 75 bps Sept Fed rate hike bets rise.

Gold News

Top 3 Cryptos Price Prediction: Faux strength or resurgence of bullish momentum?

Top 3 Cryptos Price Prediction: Faux strength or resurgence of bullish momentum?

Bitcoin price shows a resurgence of buying pressure as the eastern markets open fresh to a new week. This development could turn sour if BTC fails to overcome a significant hurdle.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures