EUR/USD remains under pressure near 1.1900 ahead of EMU CPI
- EUR/USD hovers around the 1.1900 yardstick on Wednesday.
- Markets remain vigilant on quarter-end flows, upcoming US data.
- German Unemployment Rate stayed put at 3.9% in June.
EUR/USD navigates within a narrow range around the 1.1900 neighbourhood on Wednesday.
EUR/USD focuses on EMU, US data
EUR/USD fades the earlier spike to levels just beyond 1.1900 the figure and resumes the recent downside amidst the continuation of the upbeat note in the greenback, quarter-end flows and the offered bias in the risk complex.
Indeed, investors keep the cautious stance in light of the release of US Nonfarm Payrolls on Friday, while the advance of the Delta variant of the coronavirus pours some cold water over the ongoing optimism regarding the re-opening of the economy.
In the domestic docket, the German labour market showed the jobless rate stayed unchanged at 3.9% in June and the Unemployment Change went down by 38K in the same period. Later, inflation figures in the broader Euroland and Italy are also due.
Across the pond, MBA will publish its weekly Mortgage Applications followed by the ADP report, the Chicago PMI, Pending Home Sales and the weekly report on crude oil supplies by the EIA.
What to look for around EUR
Sellers seem to have regained the upper hand and drag EUR/USD back to the area below the 1.1900 key support. In the meantime, price action in spot is expected to monitor the dollar dynamics, particularly following the latest FOMC gathering, prospects of higher inflation and potential tapering before anticipated. Further out, support for the European currency comes in the form of auspicious results from fundamentals in the bloc coupled with higher morale, prospects of a strong rebound in the economic activity and the investors’ appetite for riskier assets.
Key events in the euro area this week: German labour market report, flash EMU CPI (Wednesday) – German Retail Sales, Final Manufacturing PMIs in the euro area, EMU Unemployment Rate, ECB’s Lagarde.
Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the vaccine rollout. Probable political effervescence around the EU Recovery Fund. German elections. Investors’ shift to European equities.
EUR/USD levels to watch
So far, spot is losing 0.06% at 1.1888 and a break below 1.1847 (monthly low Jun.18) would target 1.1835 (low Mar.9) and route to 1.1704 (2021 low Mar.31). On the other hand, the next resistance emerges at 1.1976 (50% Fibo of the November-January rally) followed by 1.1995 (200-day SMA) and finally 1.2000 (psychological level).