On Tuesday, the European currency dropped EURUSD to fresh lows around the 1.0670 range, indicating. That it is still on the defensive.
The EURUSD falls as a result of USD purchases.
On Tuesday, the EURUSD loses ground for the sixth consecutive session. And breaks through the 1.0700 support level for the first time since late March, always in reaction to the dollar’s relentless march north. And a corrective move in the risk-related market.
Meanwhile, investors are anticipated to pay particular attention to the US political scene. In which legislators will begin debating the newly announced bipartisan deal on the US debt ceiling.
Furthermore, note should be closely monitored in light of the impending US Nonfarm Payrolls (Friday) and the implications for the Fed’s June 14 interest rate decision.
In the eurozone, the final European Commission Consumer Confidence, as well as Economic Sentiment and Industrial Sentiment, are forthcoming. In the United States, the Conference Board’s Consumer Confidence Index will take center stage, followed by the FHFA’s House Price Index.
What to watch for in the EUR?
The EURUSD sell-off looks to be continuing after the pair fell below the critical support level of 1.0700 on Tuesday.
Meanwhile, the pair’s price movement is expected to closely mimic that of the US Dollar and will be influenced by any variations in attitude between the two currencies. Concerning the Fed and the ECB’s intentions to alter interest rates.
Moving forward, aggressive ECB rhetoric continues to promote more rate rises, despite some loss of momentum in the region’s economic fundamentals.
This week’s key events in the eurozone include: EMU Final Consumer Confidence, Economic Sentiment, and Industrial Sentiment (Tuesday) – Germany. Unemployment Rate, Unemployment Rate Change, ECB Lagarde (Wednesday) – Germany EMU Final Manufacturing PMI, Retail Sales/Final Manufacturing PMI, Flash Inflation Rate, ECB Lagarde, ECB Accounts (Thursday).
On the back burner: the continuation of the ECB hike cycle in June and July (and September?). The impact of the Russia-Ukraine conflict on the region’s GDP prospects and inflation projections. The dangers of inflation entrenched.
EURUSD levels to keep an eye on.
So far, the pair is down 0.31% at 1.0673, with support around 1.0672 (monthly low May 30), followed by 1.0516 (low March 15), and lastly 1.0481 (2023 low January 6). A break over 1.0813 (100-day SMA) would target 1.0878 (55-day SMA) before reaching 1.1000 (round level).
