EUR/USD struggles for direction around 1.1230, focus on PMIs


  • EUR/USD looks directionless around 1.1230 on Friday.
  • Markit’s Services PMIs next of relevance In the euro area.
  • US market will be close due to the Independence Day holiday.

The single currency remains within the multi-session consolidative range, with EUR/USD hovering around the 1.1230/40 band following the opening bell in Euroland.

EUR/USD stays supported near 1.1170

EUR/USD sticks to the side-lined theme so far at the end of the week, always around 1.1230/40 and with clear and decent support near 1.1170.

In the meantime, the broader risk appetite trends continue to drive the sentiment in the global markets, with the relentless advance of the coronavirus pandemic in centre stage and against the backdrop of the gradual re-opening of the economy around the world.

Later in the docket, the final Services PMIs in the euro area for the month of June will be the only publication of note on this side of the Atlantic. In the US, markets will be closed due to the Independence Day holiday.

What to look for around EUR

EUR/USD remains well supported around the 1.1170 region so far. In the meantime, investors continue to gauge the gradual and relentless re-opening of the economy in Europe against the possibility of a second wave of contagion (as per new coronavirus outbreaks around the world). The constructive view in the euro, however, remains well sustained by the improvement of some fundamentals in the region, in turn propped up by persistent (and massive) monetary stimulus by central banks. On top, the solid performance of the region’s current account is also adding to the attractiveness of the shared currency.

EUR/USD levels to watch

At the moment, the pair is receding 0.12% at 1.1226 and faces immediate contention at 1.1168 (monthly low Jun.19) seconded by 1.1147 (high Mar.27) and finally 1.1037 (200-day SMA). On the other hand, a breakout of 1.1348 (weekly high Jun.23) would target 1.1422 (monthly high Jun.10) en route to 1.1495 (2020 high Mar.9).

 

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