- The dollar with moderate strength on Tuesday, the DXY rises 0.30%.
- No impact data ahead on Tuesday.
- EUR/USD falls for the third day in a row.
The EUR/USD fell to 1.0664, marking a fresh five-day low. The decline came after the pair rose to 1.0704, but failed to hold. The dollar is showing some strength on Tuesday.
The dollar index rises 0.30% and hit a two-week high. Today Treasury bond yields do not follow the dollar, and are falling, but so are the Germans. The declines in equity markets reflect some risk aversion that drives demand for safer assets.
As regards data from the Eurozone A stronger-than-expected recovery was reported in the June Sentix Investor Confidence Index from -22.6 to -15.8. Previously, the report on German factory orders for April had been published, which showed an unexpected drop of 2.7%, against a consensus of 0.5%. The key event in the region will be the meeting of the Governing Board of the European Central Bank (ECB).
Expectations are growing for the ECB meeting, which in addition to announcing the end of the purchase program, would set the stage for a rate hike. In turn, the specialized press reports pressure to send strong signals that there will be action if bond yields soar.
In the US, the trade balance data for April will be published on Tuesday, which is not expected to have an impact. Janet Yellen, the treasury secretary will present before a congressional committee. The focus when it comes to US data is on Friday’s inflation data ahead of next week’s FOMC meeting.
bearish EUR/USD
EUR/USD bias is bearish in intraday terms. If it manages to assert itself above 1.0685 (20-day moving average), the euro would be strengthened and could retest levels above 1.0700. The next resistance then is at 1.0730.
Key support today is the 1.0665/60 area. A confirmation below would expose last week’s low of 1.0625.
Technical levels
Source: Fx Street
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