- EUR/USD comes down and now targets 1.1250.
- EMU Industrial Production expanded 0.9% MoM in May.
- US Producer Prices up next in the NA session.
The single currency is clinging to its daily gains vs. the greenback and is now forcing EUR/USD to test the vicinity of 1.1250.
EUR/USD now focused on US data
The pair is moving higher for the third session in a row, although the 1.1280 region – where is located the 21-day SMA - continues to cap the upside on a weekly basis.
EUR comes under selling pressure today after ECB’s Visco favoured further expansionary measures in case a rebound in the economic activity of the bloc remains absent, adding that the ECB will continue to evaluate the potential measures to be implemented.
The knee-jerk in spot comes despite the Industrial Production in Euroland expanded at a monthly 0.9% during May, rebounding markedly from April’s 0.4% monthly contraction.
Later in the day and across the ocean, Producer Prices for the month of June will be the sole release along with the speech by FOMC’s C.Evans.
What to look for around EUR
The shared currency is breathing some relief after the dovish tone from Fed’s Powell and the FOMC minutes. However, this is seen as a short-live boost against the backdrop of renewed and increasing speculations of another wave of monetary stimulus from the European Central Bank in the near term, via interest rate cuts (September?) and the resumption of the QE programme. Also weighing on the currency, the dovish stance from the ECB appears reinforced by the recent appointment of ex-IMF’s C.Lagarde to succeed M.Draghi. On the macro scenario, the slowdown in the region looks unremitting and it also reinforces the current accommodative attitude of the central bank.
EUR/USD levels to watch
At the moment, the pair is gaining 0.04% at 1.1258 and a break above 1.1286 (high Jul.11) would target 1.1324 (200-day SMA) en route to 1.1412 (high Jun.25). On the other hand, the next down barrier lines up at 1.1193 (monthly low Jul.9) followed by 1.1181 (low Jun.18) and finally 1.1106 (2019 low May 23).
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