- EUR/USD rose to 1.1850 but erased its gains during American session.
- US Dollar Index stays above 93.20, reflecting broad USD strength.
- Germany will release second-quarter GDP report and IFO sentiment data on Tuesday.
The EUR/USD pair posted weekly losses for the first time since mid-June last week but staged a rebound during the first half of the day on Monday. However, the pair met resistance near 1.1850 and erased its daily gains. As of writing, EUR/USD was virtually unchanged on the day at 1.1798.
A recovery witnessed in the US Treasury bond yields during the American trading hours helped the greenback gather strength in the absence of any significant macroeconomic data releases. The US Dollar Index, which fell to a daily low of 92.84, was last seen posting modest daily gains at 93.28.
On Tuesday, second-quarter Gross Domestic Product (GDP) report, IFO Business Climate and Current Assessment data from Germany will be watched closely by the market participants. The advanced estimate showed that the German economy contracted by 11.7% on a yearly basis and markets expect the final reading to remain unchanged. However, if the IFO data show a further deterioration in business sentiment, the shared currency could continue to weaken against the USD.
EUR/USD near-term outlook
In a recently published report, analysts at MUFG Bank noted that EUR/USD could extend its correction if it fails to reclaim 1.1200.
“A break below support 1.1700 would open the door to a deeper correction lower. We have highlighted renewed FX instability in Turkey and the increasing spread of COVID in Europe as two potential triggers for a correction, both of which remain in play," analysts explained. "The upcoming Jackson Hole symposium could prove a key test in the week ahead. If EUR/USD is unable to break above 1.2000 after a dovish Fed policy signal, it would strongly suggest a lot of the bad news is already priced into the USD.”
Key levels to watch for
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 clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.