- EUR/USD fades initial gains and recedes to the 1.1840 region.
- German Factory Orders jumped 27.9% MoM in June.
- US Initial Claims will take centre stage later in the NA session.
Following fresh 2020 highs near 1.1920 during early trade, EUR/USD has now retreated to the negative ground and navigates in the mid-1.1800s (at the time of writing).
EUR/USD looks to USD, data
EUR/USD is now losing some upside momentum in response to the pick-up in the demand for the greenback. In addition, the current overbought conditions of the pair carry the potential to spark some profit taking as well as a more lasting corrective downside.
Despite the ongoing knee-jerk, the underlying bullish trend appears unchanged around EUR/USD and the rest of its risk peers, while attention has now shifted to the US political scenario and the discussions around an extra stimulus package.
Earlier in the euro docket, the German Factory Orders expanded nearly 28% from a month earlier in June, adding to the idea of a ‘V’-shaped rebound in the first economy of the region. Additional data in Germany saw the Construction PMI rebounding to 47.1 during last month (from 41.3).
Later in the US data space, June’s Challenger Job Cuts are due ahead of the usual weekly Claims and the speech by FOMC’s R.Kaplan.
What to look for around EUR
EUR/USD came under pressure soon after hitting new 2020 highs in the 1.1915/20 band on Thursday. The sharp move up in past weeks, while largely triggered by broad-based dollar-selling, has found extra sustain in auspicious results from domestic fundamentals, which have been in turn supporting further the view of a strong economic recovery in the wake of the coronavirus fallout. Also lending wings to the momentum around the euro appear the recently clinched deal on the European Recovery Fund – which helped putting political fears within the bloc to rest (for now) – and the solid position of the current account in the region.
EUR/USD levels to watch
At the moment, the pair is losing 0.11% at 1.1849 and faces immediate contention at 1.1695 (weekly low Aug.3) followed by 1.1495 (monthly high Mar.9) and finally 1.1448 (50% Fibo of the 2017-2018 rally). On the other hand, a breakout of 1.1916 (2020 high Aug.6) would target 1.1996 (high May 14 2018) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally).
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 trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold price sits at all-time highs above $2,230, US PCE eyed
Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.