EUR/USD remains depressed and capped by 1.1800 so far


  • EUR/USD remains well on the defensive in sub-1.1800 levels.
  • The re-emergence of the risk-off mood continues to weigh on the pair.
  • German Producer Prices surprised to the upside in June.

Sellers remain well in control of the sentiment around the single currency, with EUR/USD navigating the area of recent lows near 1.1790 on turnaround Tuesday.

EUR/USD offered on USD-buying

EUR/USD sheds ground since last Thursday on the back of the solid demand for the greenback, which in turn remains propped up by the pick-up in the risk aversion in the global markets.

Indeed, fresh coronavirus jitters exclusively stemming from the spread of the Delta variant continue to hurt the risk complex and force the pair to remain entrenched in the negative territory, as well as the rest of the risk-associated peers.

Data wise in Euroland, German Producer Prices came in above estimates in June, rising at a monthly 1.3% and 8.5% over the last twelve months. In addition, the Current Account surplus in the broader euro area shrank to €4.3 billion in May.

Later in the US docket, Housing Starts and Building Permits will be in the limelight ahead of the API’s weekly report.

What to look for around EUR

The resumption of the downside in EUR/USD puts the key 2020-2021 support line (in the 1.1770/80 band) to the test. 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 at the next event later in the week, which carries the potential to keep the euro well under pressure.

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 losing 0.04% at 1.1792 and a breakdown of 1.1762 (78.6% Fibo of the November-January rally) would target 1.1704 (2021 low Mar.31) en route to 1.1602 (November 2020 low). On the other hand, the next hurdle is located at 1.1895 (weekly high Jul.6) followed by 1.1975 (weekly high Jun.25) and finally 1.2002 (200-day SMA).

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

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD struggles around 1.17 on yield-fueled dollar strength

EUR/USD is pressured under 1.17 as the dollar benefits from higher US Treasury yields. US Durable Goods Orders beat estimates with 1.8%. The center-left SPD came on top in the German elections.

EUR/USD News

GBP/USD hovers around 1.37. dismissing UK petrol crisis

GBP/USD is trading at around 1.37, as sterling shrugs off the drying up of some petrol stations due to Brexit-related lorry driver shortages.

GBP/USD News

XAU/USD eyes $1767 critical supply zone

Gold is easing off the higher levels, as the risk-on market environment amid ebbing China Evergrande fears and US stimulus optimism dulls the safe-haven appeal of the bright metal.

Gold News

Huobi to stop servicing Chinese users as China vows strict crackdown on crypto

A few months after the cryptocurrency mining ban in China, the country issued another update last week, reiterating that digital assets are banned and crypto exchanges are prohibited.

Read more

Apple: Is the new iPhone 13 a reason to buy?

Apple stock barely registers any change on Friday. AAPL closes at $146.92 for a tiny gain. Stocks are struggling for upside momentum from the latest dip.

Read more

Forex MAJORS

Cryptocurrencies

Signatures