EUR/USD wobbles around 1.1330 post-data, US-China jitters

  • EUR/USD rebounds from lows in the 1.1320/15 band.
  • US Initial Claims rose less than expected during last week.
  • EuroGroup members will vote to elect the new President later.

Following a short-lived dip to the 1.1320/15 band earlier in the session, EUR/USD has managed to regain buying interest albeit limited by fresh geopolitical concerns.

EUR/USD bid, as risk appetite prevails

EUR/USD is looking to add to Wednesday’s gains well above 1.1300 the figure in a context where the risk appetite continues to be preferred among market participants.

However, risk trends now seeing shedding some ground after the White House announced it will bar companies from government contracts that use products of some Chinese companies (Huawei and ZTE among others).

In the docket, US Initial Claims rose just above 1,3 million during last week and Continuing Claims are firm around 18 million, showing that the deterioration of the labour market could last longer than forecasted.

Earlier in the euro area, German trade balance widened in May, with Imports and Exports bouncing off previous levels albeit less than predicted.

Later on Thursday, the EuroGroup will elect its new President between P.Donohoe (Ireland), P.Gramegna (Luxembourg) and N.Calviño (Spain).

What to look for around EUR

EUR/USD managed to advance to fresh multi-week peaks around 1.1370, always supported by the solid improvement in the risk-associated universe. The constructive view in the euro, in the meantime, stays well and sound and supported by the improvement of key fundamentals in the region amidst the current (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 losing 0.03% at 1.1326 and faces initial support at 1.1168 (monthly low Jun.19) seconded by 1.1147 (high Mar.27) and finally 1.1045 (200-day SMA). On the other hand, a break above 1.1370 (monthly high Jul.9) would target 1.1422 (monthly high Jun.10) en route to 1.1495 (2020 high Mar.9).


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