On Wednesday, the EUR/USD pair is hovering around the 1.1900 level.
The markets are keeping a close eye on quarter-end flows and incoming US statistics.
In June, Germany’s unemployment rate remained unchanged at 3.9 percent.
On Wednesday, the EUR/USD trades in a tight range around the 1.1900 level.
With the greenback’s optimistic tone, quarter-end flows, and the risk complex’s offered bias, the EUR/USD fades the previous surge to levels just over 1.1900 and resumes the recent fall.
Indeed, markets remain wary ahead of the reporting of US Nonfarm Payrolls on Friday, as the spread of the Delta version of the coronavirus casts doubt on the economy’s reopening.
In domestic news, the German labor market indicated that the unemployment rate remained constant at 3.9 percent in June, but the Unemployment Change decreased by 38K. Inflation numbers for the rest of Europe and Italy will be released later.
The MBA will release its weekly Mortgage Applications data, which will be followed by the ADP report, the Chicago PMI, Pending Home Sales, and the EIA’s weekly report on crude oil supply.
Sellers appear to have reclaimed the upper hand, dragging EUR/USD back below the critical support level of 1.1900. Meanwhile, spot price action is expected to keep a close eye on the dollar’s dynamics, particularly in light of the current FOMC meeting, expectations of increased inflation, and the possibility of tapering earlier than planned. Further out, the European currency is supported by positive fundamentals in the EU, as well as improved morale, the expectation of a substantial comeback in economic activity, and investors’ demand for riskier assets.
This week’s major events in the eurozone include: Flash update on the German labor market EMU CPI (Wednesday): German Retail Sales, Eurozone Final Manufacturing PMIs, EMU Unemployment Rate, and ECB’s Lagarde.
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 vaccine’s dissemination is progressing. Political effervescence around the EU Recovery Fund is likely. Elections in Germany. The move of investors to European equities.
So far, spot is down 0.06 percent at 1.1888, with a breach below 1.1847 (monthly low Jun.18) aiming for 1.1835 (low Mar.9) and a route to 1.1704 if it breaks below 1.1847 (monthly low Jun.18) (2021 low Mar.31). The next resistance level, on the other hand, is 1.1976 (50 percent Fibo of the November-January surge), followed by 1.1995 (200-day SMA), and then 1.2000. (psychological level).
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