Euro keeps the trade above 1.1200 against the US Dollar
The Euro (EUR) managed to regain some ground and advance modestly against the US Dollar (USD) on Thursday. This encouraged EUR/USD to climb back above the 1.1200 level against the backdrop of a still fluctuating risk sentiment. The recent gains in the Dollar appear to be fading, leaving the US Dollar Index (DXY) hovering around the low 100.00s amid a mild rebound in US yields across all maturities. Going forward, the European currency is expected to consolidate in a tight range ahead of key central bank meetings next week from the Federal Reserve and the European Central Bank (ECB). While both central banks are widely expected to raise rates by a quarter point, there is an incipient divergence in their near-term policy outlooks.
That said, the Fed is perceived as nearing the end of its tightening cycle, while ECB officials have sounded less hawkish recently on the prospect of further hikes beyond the summer. In Eurozone data, German Producer Prices contracted 0.3% MoM in June and rose 0.1% YoY. Additionally, the euro area's Current Account surplus widened to €9.1B in May. Later in the session, the European Commission will publish its preliminary gauge of July Consumer Confidence. In the US, the usual weekly Initial Jobless Claims are due out first, followed by the Philadelphia Fed Manufacturing Index, the CB Leading Index, and Existing Home Sales.
EUR/USD seems to have settled in a consolidative fashion around 1.1200 following recent overbought levels. The pair printed a new 2023 high at 1.1275 on July 18. Once this level is cleared, there are no resistance levels of significance until the 2022 peak of 1.1495 recorded on February 10. On the downside, there is minor support at the weekly low at 1.1174 on Wednesday prior to the psychological 1.1000 mark, all seconded by provisional support at the 55-day and 100-day Simple Moving Averages at 1.0896 and 1.0877, respectively, ahead of the July 6 low of 1.0833. The breakdown of this region should meet the next contention area at the key 200-day SMA at 1.0681 prior to the May 31 low of 1.0635. South from here emerges the March 15 low of 1.0516 before 2023 low of 1.0481 on January 6. The constructive view of EUR/USD appears unchanged as long as the pair trades above the key 200-day SMA.
EUR/USD seems to have settled in a consolidative fashion around 1.1200 following recent overbought levels. The pair printed a new 2023 high at 1.1275 on July 18. Once this level is cleared, there are no resistance levels of significance until the 2022 peak of 1.1495 recorded on February 10. On the downside, there is minor support at the weekly low at 1.1174 on Wednesday prior to the psychological 1.1000 mark, all seconded by provisional support at the 55-day and 100-day Simple Moving Averages at 1.0896 and 1.0877, respectively, ahead of the July 6 low of 1.0833. The breakdown of this region should meet the next contention area at the key 200-day SMA at 1.0681 prior to the May 31 low of 1.0635. South from here emerges the March 15 low of 1.0516 before 2023 low of 1.0481 on January 6. The constructive view of EUR/USD appears unchanged as long as the pair trades above the key 200-day SMA.