EUR/USD extends the rebound to the 1.0550 region
The single currency regains the smile and lifts EUR/USD to the area of daily highs near 1.0550 on Friday. EUR/USD quickly forgot about Thursday’s pullback and resumed the upside at the end of the week on the back of the renewed offered stance in the greenback and the tepid recovery attempt in yields in both the US and German money markets. In the meantime, investors seem to have left behind Powell’s testimonies and continue to closely follow news surrounding the start of the hiking cycle by the ECB as well as any details regarding the bank’s plans to fight fragmentation.
In the domestic calendar, the German Business Climate tracked by the IFO institute missed estimates and deteriorated a tad to 92.3 in June (from 93.0) in what was the sole release in the euro area on Friday.
In the US, the final Consumer Sentiment for the current month will grab all the attention seconded by May’s New Home Sales. However, EUR/USD is still far away from exiting the woods and it is expected to remain at the mercy of dollar dynamics, geopolitical concerns, and the Fed-ECB divergence, while higher German yields, persistently elevated inflation in the euro area, and a decent pace of the economic recovery in the region is also supportive of an improvement in the mood around the euro. So far, the spot is gaining 0.25% at 1.0543 and a breakout of 1.0605 (weekly high June 22) would target 1.0623 (55-day SMA) en route to 1.0786 (monthly high May 30). On the other hand, the next support emerges at 1.0358 (monthly low June 15) followed by 1.0348 (2022 low May 13) and finally 1.0300 (psychological level).
In the US, the final Consumer Sentiment for the current month will grab all the attention seconded by May’s New Home Sales. However, EUR/USD is still far away from exiting the woods and it is expected to remain at the mercy of dollar dynamics, geopolitical concerns, and the Fed-ECB divergence, while higher German yields, persistently elevated inflation in the euro area, and a decent pace of the economic recovery in the region is also supportive of an improvement in the mood around the euro. So far, the spot is gaining 0.25% at 1.0543 and a breakout of 1.0605 (weekly high June 22) would target 1.0623 (55-day SMA) en route to 1.0786 (monthly high May 30). On the other hand, the next support emerges at 1.0358 (monthly low June 15) followed by 1.0348 (2022 low May 13) and finally 1.0300 (psychological level).