- EUR/USD extends recovery above 1.0500 level.
- The dollar continues to weaken at the beginning of the week.
- Christine Lagarde, President of the ECB, will testify before the European Parliament.
The selling bias around the US dollar and the improvement in risk sentiment and lifts the EUR/USD above the 1.0500 level on Monday.
EUR/USD pending Lagarde and the ECB speech
EUR/USD shakes off Friday’s weakness and recovery resumes after FOMC-driven drop to levels below 1.0400 sometime last week.
Monday’s bullish move is coming accompanied by a further correction of the US dollar, along with the inactivity of the US markets due to the June 19 holiday. Furthermore, 10-year German Bund yields remain intact at the limits of the range near 1.70%.
In the economic calendar of the eurozone, the president of the ECB, Christine Lagarde. will speak before the European Parliament. In addition, the members of the Board of Directors P. Lane and F. Panetta will also speak.
What can we expect around the EUR?
The EUR/USD keeps the recovery mode unchanged and manages to recover above the 1.0500 area on Monday.
The resumption of the buying bias responds to the selling tone around the US dollar, especially after the Fed hike in interest rates last week.
However, EUR/USD is still far from coming out of the woods and is expected to remain at the mercy of the dynamics of the dollar, geopolitical concerns and the divergence between the monetary policies of the Fed and the ECBwhile rising German yields, persistently high inflation in the eurozone and a decent pace of economic recovery in the region also favor an improving sentiment around the euro.
EUR/USD levels
At time of writing, the EUR/USD pair is gaining 0.34% on the day, trading at 1.0528. The next resistance is at 1.0601 (15th June high), followed by 1.0649 (55-day SMA) and 1.0786 (30th May high). On the other hand, a break below 1.0358 (15 Jun low) would target 1.0348 (13 May low) on the way to 1.0300 (psychological level).
Source: Fx Street
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