EURUSD concentrated on USD dynamics
The EURUSD is under some modest negative pressure following Thursday’s monthly peaks. In the area below 1.0800, as the greenback shows some signs of life despite a so far weak recovery.
Meanwhile, the pair’s recent gain was prompted by the pronounced knee-jerk. In the greenback, particularly with growing speculation of a stalemate in the Fed’s normalization process. At the June 14 meeting.
In sharp contrast to the latter. The European Central Bank investors are penciling in another quarter-point rate hike in July, with a comparable move in September not ruled out. The Fed remains ready to continue the boosting cycle beyond the June event.
The only release on the domestic calendar will be Industrial Production in Italy, coinciding with a speech by ECB Vice President L. De Guindos.
What to watch for Euro
EURUSD is trading near the 1.0800 level, despite the greenback’s feeble comeback attempt.
Meanwhile, the pair’s price action is expected to closely mimic that of the US Dollar and will be influenced by any variations in approach between the Fed and the ECB in terms of interest rate adjustment plans. continues to favor additional rate hikes, despite some loss of momentum in regional economic fundamentals.
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. Inflationary risks are getting entrenched.
Technical levels to keep an eye on
So far, the pair is down 0.11% at 1.0770, with the next support levels at 1.0635 (monthly low May 31), 1.0516 (low March 15), and 1.0481 (2023 low January 6). Surpassing 1.0787 (monthly high June 8) would aim 1.0807 (100-day SMA) on the way to 1.0880 (55-day SMA).
