EUR/USD: US coronavirus figures to limit further gains

EUR/USD has been recovering above the key 1.12 level as conditions are in place for the pair to extend its gains, yet the US coronavirus situation may limit any advance, FXStreet’s analyst Yohay Elam. 

Key quotes

“The list of states suffering from rising infections, re-closing parts of the economy, or halting the reopening is growing – with the latest limitations coming from Colorado and Idaho. The EU is opening its borders to visitors but is shunning high-spending US tourists amid the disease. While the deterioration in coronavirus began in mid-June, figures from earlier in the month look upbeat, encouraging investors.” 

“The first day of the new quarter features top-tier US indicators. First, ADP's private-sector labor statistics are projected to show a bounce of around three million jobs. While the firm significantly missed in May figures for June will likely rock markets. The second release is the ISM Manufacturing Purchasing Managers' Index, which carries expectations for a rebound to just under 50 – representing minor contraction. If it tops that threshold, it could further boost markets. Lastly, the Fed minutes may show if policymakers are upbeat about the recovery or worried about long-term damage to the economy.” 

“US politics are gaining more traction as further opinion polls have shown challenger Joe Biden is leading against incumbent President Donald Trump by around ten points. Voters are displeased with the direction of the country and apart from replacing the man at the White House, they may vote in a Democratic majority in the Senate – a nightmare scenario for markets.”