- EUR/USD remains pressured around one-month low, down for third consecutive day.
- Sluggish markets back US dollar amid fears of Fed action.
- G7 couldn’t pamper EU policymakers despite upbeat announcements.
- Eurozone Industrial Production may entertain traders but risk catalysts are the key.
EUR/USD sellers flirt with monthly bottom, flashed Friday, amid sluggish trading hours of early Monday. Even so, the bearish bias remains intact for the third day as the quote prints 0.10% losses on the day around 1.2095 heading into the European session.
Market’s rush to risk-safety puts a bid under the US dollar and weighs down the quote despite an absence of fresh catalysts. The cautious mood could be traced from the pre-Fed indecision and a lack of major positives for the bloc after the Group of Seven (G7) meeting. Also offering a tailwind to the pair could be the recently strong US data and the G7 verdict that seems to escalate the tussles between the West and China.
US dollar index (DXY) gains around 0.08% while keeping Friday’s upside momentum around 90.57. The greenback gauge jumped the most in a week the previous day on strong Michigan Consumer Sentiment Index renewing a push for the Fed tapering. Additionally helping the USD is be the uncertainty over President Joe Biden’s infrastructure spending plan as well as fears relating to the covid variants.
Elsewhere, G7 agreed over a tough stand against Beijing as policymakers backed detailed investigations on the covid origin as well as criticized China’s roe Xinjiang and Hong Kong.
Furthermore, Brussel’s failure to get Biden strongly on their side, as far as Brexit is concerned, also weighs on the EUR/USD prices. The bloc policymakers push for American meddling to break the deadlock over the Northern Ireland (NI) protocol. However, Biden refrained from any strong warning to UK PM Boris Johnson.
Alternatively, improving relations between Germany and the US, coupled with the global economic recovery from the pandemic, restricts the EUR/USD downside. A light calendar and an off in Australia and China are also on the same line to test the pair sellers.
Amid these plays, the S&P 500 Futures print mild gains whereas the US 10-year Treasury yields wobble around 1.46% by the press time.
Moving on, Eurozone Industrial Production for April, expected 0.4% MoM versus 0.1% prior, could offer immediate direction but the sellers aren’t likely to give up the hopes.
Technical analysis
Although 50-day SMA tests the EUR/USD pair’s sustained trading below an ascending support line from May 13, a three-week-old falling channel and downbeat oscillators keep sellers hopeful.
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