- EUR/USD comes under further pressure near 1.1140.
- Advanced PMIs in core Euroland next of relevance.
- ECB event, German IFO also put EUR to the test.
Sellers keep dominating the sentiment around the European currency and are now forcing EUR/USD to recede to fresh 2-month lows in the 1.1140 region.
EUR/USD looks to data, ECB
Spot is down for the fourth consecutive session so far on Wednesday, as market participants continue to gauge the likeliness that the ECB could pump more stimulus in the region in the near term. In this regard, it is worth noting that bets for such announcements by the central bank at tomorrow’s meeting remain on the rise.
Collaborating with the sour mood around the pair, the greenback stays well supported by a change of heart from investors, who keep pricing in a 25 bps interest rate cut by the Fed at its meeting on August 1 instead of a larger cut.
Furthermore, the resumption of US-China trade talks and the recent deal to avoid the US debt ceiling have been also lending oxygen to the buck and undermining any serious attempt of recovery in spot.
In the docket, key advanced PMIs in core Euroland are due later in the morning. Across the pond, flash PMIs are also due seconded by housing data and the EIA report.
What to look for around EUR
Rising odds for fresh monetary easing by the ECB later in the week - in the form of interest rate cuts, the resumption of the QE programme and potential changes in the forward guidance - have been hurting the mood in EUR while keeping buyers at bay at the same time. The deep pullback in the pair now carries the potential to visit yearly lows in the 1.1100 neighbourhood. In this regard, today’s results from flash PMIs for the current month should be key.
EUR/USD levels to watch
At the moment, the pair is retreating 0.03% at 1.1147 and faces immediate contention at 1.1116 (monthly low May 30) seconded by 1.1109 (low Apr.26) and finally 1.1106 (2019 low May 23). On the upside, a breakout of 1.1286 (high Jul.11) would target 1.1311 (200-day SMA) en route to 1.1412 (high Jun.25).
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 edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.