- EUR/USD trades near Friday’s close in the 1.1220 region.
- The pair is seen sidelined ahead of Thursday’s ECB event.
- Fed rate cut, ECB easing remain in centre stage.
The shared currency remains directionless at the beginning of the week, taking EUR/USD to the 1.1220 region, close to Friday’s close.
EUR/USD focused on ECB, Fed
Following Friday’s bearish ‘outside day’ spot is now looking for direction amidst the generalized sideline theme prevailing in the global markets.
In the meantime, the pair has once again failed in the key 1.1280/90 band, where sits the 21-day SMA, sparking some selling pressure although well contained by the 1.1200 zone for the time being.
EUR is expected to remain under scrutiny this week in light of the critical ECB event on Thursday, where extra measures of monetary stimulus could be announced. In addition, preliminary PMI prints are due in Core Euroland for the current month, keeping the attention intact around the single currency.
What to look for around EUR
The inability of the pair to clear the important resistance area in 1.1280/90 has encouraged sellers to return to the markets, triggering several tests of the 1.1200 handle, albeit failing to move further south. Further out, occasional bullish attempts should be seen as a short-lived against the backdrop of renewed and increasing speculations of another wave of monetary stimulus from the European Central Bank as early as this week’s meeting, including interest rate cuts, the resumption of the QE programme and potential changes in the forward guidance.
EUR/USD levels to watch
At the moment, the pair is retreating 0.06% at 1.1213 and faces immediate contention at 1.1193 (monthly low Jul.9) followed by 1.1181 (low Jun.18) and finally 1.1106 (2019 low May 23). On the upside, a breakout of 1.1286 (high Jul.11) would target 1.1315 (200-day SMA) en route to 1.1412 (high Jun.25).
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