Around 1.1940, EUR/USD extends the sidelined theme.
German 10-year Bund rates have fallen to around -0.17%.
Later in the conference, De Guindos of the European Central Bank talks.
The EUR/USD is expected to maintain its recent stabilization around 1.1940 for another session on Monday, despite little activity in global markets.
In accordance with the broad-based rangebound trend in the rest of the global markets, the EUR/USD remains sidelined around the mid-1.1900s at the start of the week. The pair’s upside is also strongly restricted by the crucial 200-day SMA, which is currently at 1.1994.
In addition, German 10-year rates have retreated from recent highs and are presently trading around -0.16%.
Earlier in the session, F.Panetta of the European Central Bank stated that second-round inflation consequences appear to be minimal, while defending the use of a combination of fiscal and monetary policy to help the economy recover. Panetta also underscored the ECB’s unconventional flexibility and reiterated that the central bank’s forward guidance is critical for its credibility.
Earlier on the domestic front, German Import Prices increased 1.7 percent month over month in May and 11.8 percent year over year. Following the European closing bell, De Guindos of the ECB will finish the calendar.
Only the Dallas Fed Index and statements by FOMC members Williams and Quarles are due across the pond.
So far, the 1.1970/80 band has restrained the EUR/USD consolidative sentiment. In the meantime, the pair’s price movement is expected to be dominated by dollar dynamics, at least in the short term, and especially after the most recent FOMC meeting. Meanwhile, positive results from the bloc’s fundamentals, together with greater morale, the expectation of a substantial rebound in economic activity, and investors’ desire for riskier assets, provide support for the euro.
This week’s major events in the eurozone include: De Guindos of the ECB (Monday) – Final EMU Consumer Confidence, advanced German CPI, ECB’s Lagarde (Tuesday) – German labor market report, flash EMU CPI (Wednesday) – German Retail Sales, Final Manufacturing PMIs in the euro area, EMU Unemployment Rate, 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 up 0.03 percent at 1.1938, with resistance around 1.1994 (200-day SMA), 1.2028 (100-day SMA), and lastly 1.2064 (200-day SMA) (38.2 percent Fibo retracement of the November-January rally). A break below 1.1847 (monthly low Jun.18), on the other hand, would target 1.1835 (low Mar.9) and go to 1.1704. (2021 low Mar.31).
Continue reading
