- EUR / USD alternates gains with losses just below 1.1950.
- Lagarde, from the ECB, speaks later; in the US PMI data.
- Eurozone PMI exceeds expectations.
The euro is trading without a clear direction on Wednesday, and the dollar’s weakness continues to support EUR / USD, which is back below 1.1950, after falling to 1.1910.
EUR / USD now looks at the ECB and US data.
The EUR / USD is rising marginally, but enough to score the third consecutive breakthrough. The recovery has slowed for the moment at the 1.1950 area. This zone put a brake on the pair on Tuesday and also on Wednesday. If it exceeds that level, the euro would be ready to extend the increases.
The dollar shows some weakness in the market, after last week’s rally. Powell’s remarks again pointed to defining the current rise in inflation as temporary. Today Yellen will speak before a committee. With regard to data, the preliminary PMI for June and the data for the sale of new homes stand out in the US.
In the bond space, German 10-year benchmark yields ease from recent highs and retest the -0.17% region. While the US 10-year rate is stable at around 1.47%.
The Eurozone PMI data as a whole showed better than expected figures, which may have helped the euro. The best report was that of Germany while that of France was below expectations. On the afternoon of the American session, an exhibition of Christine Lagarde, the president of the European Central Bank.
What to look for around the EUR / USD
The EUR / USD rally lost momentum around 1.1950 for the time being. Price action around the pair is expected to exclusively follow dollar dynamics, at least in the very short term and particularly after last week’s FOMC meeting. Meanwhile, support for the European currency comes as economic activity picks up and investors’ appetite for riskier assets.
Key events in the euro area this week: Germany IFO Survey (Thursday) – German GfK Consumer Confidence and European Council Meeting (Friday).
Issues to consider: Asymmetric economic recovery in the region. Sustainability of the rebound in inflation figures. Vaccination progress. Likely political tension around the European Union Recovery Fund. German elections. Investors’ shift towards European equities.
Technical levels
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