EUR / USD remains in range around 1.1850

• EUR / USD upside remains capped near 1.1880.
• The dollar continues to trade amid the recovery in US yields.
• The ECB’s De Guindos foresees higher inflation in the coming months.

The EUR/USD it remains on the defensive at the 1.1850 zone so far at the start of the week.

EUR/USD limited by 1.1880

EUR / USD quickly faded the bullish attempt to recent highs in the 1.1880 region early in the session as demand for the dollar picked up a renewed pace.

Indeed, the dollar gains bullish momentum in response to the recovery in returns from the key US 10-year benchmark, which managed to retest the 1.35% region after last week’s lows of around 1.25%. .

Earlier, the ECB’s De Guindos suggested that inflation is expected to remain high over the next few months, while adding that the Council will discuss new future directions next week. On the latter, the ECB is scheduled to meet on July 22.

What to look for around EUR

EUR / USD has managed well to recover from recent lows in the 1.1780 region, just above the key 2020-2021 support line. In the meantime, price action around the spot is expected to exclusively follow dollar dynamics, particularly as investors continue to adjust to the last FOMC meeting, when the Committee opened the door to cut the QE program ahead of time. provided. Furthermore, support for the European currency in the form of auspicious results from fundamentals in the bloc now appears somewhat mitigated considering recent data, although investor morale remains high amid lingering optimism around a strong rally in the economic activity in the second half of the year.

Technical levels

So far, the pair is shedding 0.13% at 1.1862 and a break below 1.1781 (July 7 monthly low) would target 1.1762 (78.6% Fibonacci from the November-January rally) and head to 1.1704 (July 7 low). March 31, 2021). On the other hand, the next barrier emerges at 1.1895 (weekly high on July 6) followed by 1.1975 (weekly high on June 25) and finally 1.2001 (200-day SMA).