- EUR/USD pushes higher and approaches the 1.1880 zone.
- The dollar drops in the wake of the FOMC event.
- German July advanced CPI due next in the calendar.
The recovery in the single currency stays well and sound for yet another session and now lifts EUR/USD to the key resistance area around 1.1880.
EUR/USD up on USD selling, looks to the docket
EUR/USD posts gains for the fourth consecutive session so far on Thursday, putting further distance from last week’s monthly lows in the mid-1.1700s.
Spot gathers extra steam in the second half of the week in response to the increasing selling pressure hitting the dollar, particularly after the Fed showed no rush to taper the bond-purchases programme and expressed no extra worries regarding inflation.
Earlier in the domestic docket, the German jobless rate dropped to 5.7% in July, while the Unemployment Change shrank by 91K. In the broader Euroland, the final print of the Consumer Confidence came in at -4.4 in July. Next on tap comes the flash German CPI for the current month.
Across the pond, the advanced Q2 GDP figures will take centre stage followed by Initial Claims and Pending Home Sales.
What to look for around EUR
The recovery in EUR/USD picks up extra pace and challenges the critical 1.1880/90 resistance band, always following the offered bias surrounding the greenback. In the meantime, dollar dynamics in response to the US economic recovery, the Fed’s dovish stance and prospects of high inflation are still expected to dictate the price action in the pair for the time being. On the euro side of the equation, the re-affirmed dovish stance from the ECB (as per its latest meeting) is expected to keep the upside limited in spot despite auspicious results from key fundamentals and the persistent high morale in the region.
Key events in the euro area this week: German labour market report/Advanced July CPI, EMU final Consumer Confidence (Thursday) – German, EMU flash Q2 GDP/EMU advanced July CPI (Friday).
Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the Delta variant of the coronavirus and pace of the vaccination campaign. Probable political effervescence around the EU Recovery Fund. German elections. Investors’ shift to European equities in the wake of the pandemic.
EUR/USD levels to watch
So far, spot is up 0.31% at 1.1879 and faces the next up barrier at 1.1895 (weekly high Jul.6) followed by 1.1975 (weekly high Jun.25) and finally 1.2004 (200-day SMA). On the other hand, a breakdown of 1.1751 (monthly low Jul.21) would target 1.1704 (2021 low Mar.31) en route to 1.1602 (November 2020 low).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD bounces to 0.6450, shrugs off mixed Australian jobs data
AUD/USD is rebounding to test 0.6450 amid renewed US Dollar weakness in the Asian session on Thursday. The pair reverses mixed Australian employment data-led minor losses, as risk sentiment recovers.
USD/JPY drops to test 154.00 on Japan's intervention warnings
USD/JPY extends losses to test 154.00 in Asian trading on Thursday. The pair is undermined by the latest US Dollar pullback, Japan's FX intervention risks and a softer risk tone. Focus shifts to more Fedspeak and US data.
Gold price finds buyers again near $2,355 as USD licks its wounds
Gold price is attempting a tepid bounce in the Asian session, having found fresh demand near $2,355 once again. Gold price capitalizes on a softer risk tone and an extended weakness in the US Treasury bond yields, despite the recent hawkish Fed commentary.
Manta Network price braces for volatility as $44 million worth of MANTA is due to flood markets
Manta Network price was not spared from the broader market crash instigated by a weakness in the Bitcoin market. While analysts call a bottoming out in the BTC price, the Web3 modular ecosystem token could suffer further impact.
Investors hunkering down
Amidst a relentless cautionary deluge of commentary from global financial leaders gathered at the International Monetary Fund and World Bank Spring meetings in Washington, investors appear to be taking a hiatus after witnessing significant market movements in recent weeks.