The EUR/USD consolidates its gains from Wednesday and reclaims 1.1850.
Following Powell’s words, the dollar remains available.
Powell’s second testimony is scheduled after the US Initial Claims.
On Thursday, the bullish momentum in the European currency remains strong, pushing EUR/USD back to the mid-1.1800s, or new 2-day highs.
After rising from weekly lows in the 1.1770 range in recent hours, the EUR/USD is up approximately a penny.
The recovery in spot and the risk complex in general is due to a renewed offered bias in the buck, which was spurred by Chief Powell’s dovish statements before his first semiannual hearing to Congress on Wednesday.
Rates on the US 10-year Treasury note have resumed their downward trend and are now aiming for 1.30 percent, while yields on the German 10-year Bund are flirting with recent lows of -0.34 percent.
Meanwhile, risk appetite appears to be waning as GDP estimates revealed that the Chinese economy grew at an annualized rate of 7.9% in April-June, a touch lower than expected.
The euro agenda is light, but the focus will be on the data releases on the US calendar: Initial Claims, the Philadelphia Fed Index, the New York Empire State Index, and Industrial/Manufacturing Production. Powell will also appear in front of Congress once more, this time before the Committee on Banking, Housing, and Urban Affairs.
Following a dip to fresh lows of 1.1770 earlier in the week, the EUR/USD is testing the 1.1850 region. Price movement in the area In the meanwhile, spot is expected to be dominated by dollar movements, as investors respond to the Fed’s hawkish statement, expectations of increased inflation in the US, and the possibility of QE ending earlier than planned. On the euro side of the equation, recent data suggests that support for the European currency in the form of positive results from fundamentals in the bloc has waned, though investor confidence remains high amid persistent optimism about a strong rebound in economic activity in the second half of the year.
This week’s major events in the eurozone include: Final June CPI for EMU (Friday).
On the back boiler, there are a number of important considerations to consider: In the region, there has been an asymmetric economic recovery. The rate of increase in inflation is likely to continue. The Delta version of the coronavirus is progressing, as is the vaccine campaign’s pace. Political effervescence around the EU Recovery Fund is likely. Elections in Germany. In the aftermath of the pandemic, investors have shifted their focus to European equities.
So far, spot is up 0.08 percent at 1.1843, with the following resistance levels at 1.1895 (weekly high July 6), 1.1975 (weekly high June 25), and ultimately 1.2002. (200-day SMA). On the other hand, a break below 1.1771 (monthly low July 14) would lead to 1.1762 (78.6% Fibo of the November-January rally) and 1.1704. (2021 low Mar.31)./n
