EUR/USD recovers and approaches the 1.0800 region

  • EUR/USD resumes bullish path and is back targeting 1.0800.
  • Investors’ attention remains on the Fed and the ECB.
  • German yields are up a bit near 2.40% on Monday.

The common currency restores balance and drives the EUR/USD back to the top of the range, near the 1.0790 region during the European session on Monday.

EUR/USD is now targeting 1.0800

EUR/USD is quickly pulling back from Friday’s pullback and moving sharply towards the 1.0790 region at the start of the European session on Monday.

The strong rebound of the pair is due to the resumption of selling pressure around the dollarwhich in turn relegates the DXY Dollar Index to navigate in the area of ​​multi-week lows near 103.30.

Meanwhile, market participants are expected to closely monitor the release of US inflation figures, reflected in CPI on Tuesday, and interest rate decisions by the Federal Reserve on Wednesday and the ECB on Thursday.

for now, The Fed is expected to keep rates unchanged, while the ECB will tighten monetary policy with another hike rates of 25 basis points.

There are no publications scheduled for Monday in the economic calendar.

What can we expect around the EUR?

The EUR/USD pair is trading near the 1.0800 zone amid fresh selling pressure hurting the Dollar on Monday.

Meanwhile, the movement of the EUR/USD is expected to closely mirror the behavior of the US dollar and is likely to be affected by any differences in approach between the Fed and the ECB regarding their interest rate adjustment plans.

Looking ahead, the ECB’s hawkish speeches continue to favor further rate hikes, although this view appears to be in contrast to some loss of momentum in the region’s economic fundamentals.

EUR/USD levels

At time of writing, the EUR/USD pair is gaining 0.26% on the day, trading at 1.0776. Breaking above 1.0787 (June 8 high) would target 1.0805 (100-day SMA) en route to 1.0879 (55-day SMA). On the other hand, next support is at 1.0635 (May 31 low), followed by 1.0516 (March 15 low) and 1.0481 (Jan 6 low).

Source: Fx Street

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