On Friday, the EUR/USD fell further lower to 1.1820.
Producer Prices from the EMU are the following item on the euro docket.
The release of June’s payrolls will be the focus of the markets.
The eurozone currency’s selling tendency continues unabated, prompting EUR/USD to fall even more and set new lows at 1.1820 before the end of the week.
On Friday, the EUR/USD accelerates its decline, losing ground for the fifth consecutive session and trading at levels last seen in early April, all on the back of the greenback’s continuous resurgence.
In fact, when the FOMC issued an unexpectedly hawkish statement at its June meeting, the improving mood in the dollar has been placing extra pressure on the pair.
The greenback received additional support this week as a consequence of positive findings from the ADP report and the weekly Initial Claims data, which were released on Wednesday and Thursday, respectively.
Producer prices in the euro area are due for the month of May later in the domestic calendar, followed by Chairwoman Christine Lagarde’s statement at the Euro Summit in Brussels.
The labor market report, Balance of Trade statistics, and Factory Orders will all be the focus of attention on the other side of the Atlantic.
For the time being, sellers have a firm grip on the EUR/USD sentiment, as spot price action is expected to be dominated by dollar dynamics, particularly in light of the last FOMC meeting, expectations of increased inflation, and the possibility of tapering earlier than expected. 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: Producer Prices in the EMU, ECB’s Lagarde (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 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 0.15 percent at 1.1830, and a break below 1.1822 (July’s monthly low) would target 1.1762 (the 78.6 percent Fibo of the November-January rally) and 1.1704, respectively (2021 low Mar.31). The next resistance level, on the other side, is 1.1975 (weekly high of June 25), followed by 1.1996 (200-day SMA), and finally 1.2000. (psychological level)./n
