The EURUSD is defending its week-start comeback, with Euro bulls in control heading into Tuesday’s European session. As a result, the major currency pair continues stronger around 1.0925. As it makes its way to the intraday high ahead of the significant triggers from the old continent and the US.
Nonetheless, the market’s cautious optimism and a weaker US dollar contribute to the Euro pair’s upward momentum. As the European Central Bank meets. After an unremarkable ceremonial opening on Monday. The Forum begins with crucial remarks. Furthermore, hawkish statements from ECB officials. And confidence from the German bank help the EURUSD bulls to maintain control.
The US Dollar Index (DXY) fell for the second day in a row, down 0.16% intraday to 102.60 by press time. However, the dollar’s index against the six main currencies bears. The burden of China-inspired risk-on sentiment and money market enemies.
The People’s Bank of China’s (PBoC) lower-than-expected fixing of the USDCNY price. Along with suspected dumping of the US Dollar in offshore currency markets, weighed on the USD. Furthermore, reports that Asian lobbyists are pressing for easing requirements. For the listing of Chinese equities and headlines. Traders might stay hopeful since it appears that the anxieties around Moscow’s mutiny have subsided.
At home, European Central Bank (ECB) policymaker Matin Kazaks recently stated that if inflation stays too high. The central bank would raise interest rates beyond the July meeting. In its monthly report on Monday, Germany’s Bundesbank ruled out recession worries. Stating that the German economy looks to have bottomed out. And is expected to register a minor increase in GDP in the second quarter (Q2).
Against this backdrop, S&P500 Futures post their first daily gain in three days after rebounding from their lowest levels in eight days, up 0.30% intraday at 4,382 at the latest, while US 10-year and two-year Treasury bond yields continue to rise. Lately, though, they have failed to support the USD’s recovery.
On the contrary, Monday’s optimistic US activity data from the Dallas Fed joins geopolitical concerns originating from Russia, weighing on the EURUSD pair owing to Moscow’s tactical flying manoeuvres over the Baltic Sea.
It’s worth noting that the EU’s impending recession, as well as the comparably cheerful US data and the Fed, might provide a challenge to pair buyers if ECB President Christine Lagarde fails to convince the hawks during her address at the ECB Forum. Furthermore, strong US data may apply pressure on the quotation. However, US Durable Goods Orders for May are predicted to fall by 1.0% vs 1.1% before, as is the US Conference Board’s (CB) Consumer Confidence for June. Arriving at 103.90 vs 102.30 previously will be key to monitor.
EURUSD Technical Outlook
EURUSD warrants a break from the 50-day Exponential Moving Average (EMA), which was at 1.0850 at the time of publication, as well as the bullish MACD signal and optimistic RSI (14) line, to target the resistance area encompassing 1.0950 and 1.1000, which includes various levels set since early April.
