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EUR/USD: Bears keep rally capped around 1.0220, focus on ECB

  • EUR/USD bullish attempt runs out around 1.0220.
  • The ECB will publish the minutes of its meeting later in the day.
  • Initial jobless claims and trade balance figures stand out on today’s economic calendar.

The pair EUR/USD clings to modest earnings around the area of ​​1.0200 Thursday.

EUR/USD remains under pressure… and close to parity

EUR/USD rebounds from the 1.0160 region, an area it revisited on Wednesday for the first time since December 2002.

The sharp pullback in the pair is due to speculation about a recession, which at the same time is underpinned by prospects of further tightening by major central banks. As for the latter, the ECB is expected to raise rates by 25 basis points at its meeting at the end of the month, although a larger move is not ruled out for the time being.

In the German money market, the 10-year Bund yields gain some traction, leaving behind two consecutive daily declines after the opening bell in the eurozone.

Regarding the economic data, Germany’s industrial production grew less than expected, by 0.2% mom in May. Later in the day, ECB Council Member Patrick Lane is scheduled to make a speech, followed by the release of the minutes of the last meeting of the ECB.

Across the Atlantic, initial jobless claims and trade balance figures stand out on today’s economic calendar.

What can we expect around the EUR?

The bears are keeping EUR/USD under heavy pressure and the acceleration of the decline opens the door to a likely visit to the parity level sooner rather than later.

Indeed, the pair’s price action remains subdued, closely following growing speculation around a likely recession in the region, dollar dynamics, geopolitical concerns, fragmentation fears, and the Fed/Euro divergence. ECB.

EUR/USD levels

At time of writing, the EUR/USD pair is up 0.08% on the day, trading at 1.0189. A break of 1.0551 (55-day SMA) would target 1.0615 (27 Jun high) on the way to 1.0773 (9 Jun high). Elsewhere, next support is at 1.0161 (July 6 low), followed by 1.0100 (round level) and 1.0060 (Dec 11, 2002 low).

Source: Fx Street

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