- EUR / USD hovers around the 1.1900 region on Wednesday.
- Markets remain expectant on end-of-quarter cash flows and US data.
- The German unemployment rate remained at 3.9% in June.
The pair EUR / USD moves within a tight range around the 1.1900 region on Wednesday.
EUR / USD focuses on data
EUR / USD retraces the initial rally to just above the 1.1900 round level and resumes the recent decline amid continued bullish sentiment around the USD, the cash flows at the end of the quarter and the decrease in risk appetite.
Indeed, investors remain cautious ahead of the release of US Nonfarm Payrolls NFP on Friday, while The advance of the delta variant of the coronavirus pours some cold water on optimism regarding the reopening of the economy.
In the economic calendar of the eurozone, the German labor market showed that the unemployment rate was unchanged at 3.9% in June and the change in unemployment fell by 38,000 in the same period. Later, inflation figures for the eurozone in general and Italy will also be released.
Across the Atlantic, MBA will post its weekly mortgage applications, followed by the ADP report, Chicago PMI, pending home sales and the weekly EIA crude supplies report.
What can we expect around the EUR?
Sellers appear to have regained control and drag EUR / USD back below 1.1900 support. Meanwhile, the pair’s price action is expected to follow the dollar’s dynamics, particularly after the last FOMC meeting, the prospects for higher inflation, and the possible reduction in bond purchases ahead of schedule. Additionally, support for the common currency comes in the form of upbeat results on the bloc’s fundamentals coupled with increased confidence, prospects for a strong rebound in economic activity and investor appetite for riskier assets.
Key events in the eurozone this week: IGerman Labor Market Report, Eurozone CPI (Wed) – German Retail Sales, Eurozone Final Manufacturing PMIs, Eurozone Unemployment Rate, Lagarde from the ECB.
Eminent Background Issues: Asymmetric economic recovery in the region. Sustainability of the rebound in inflation figures. Progress of the vaccine implantation. Likely political turmoil around the EU Recovery Fund. German elections. Investors’ shift to European equities.
EUR / USD levels
At the time of writing, the EUR / USD pair is shedding 0.06% on the day, trading at 1.1888. A break below 1.1847 (June 18 low) would target 1.1835 (March 9 low) and 1.1704 (March 31 low). On the other hand, the next resistance appears at 1.1976 (50% Fibonacci retracement of the November-January movement), followed by 1.1995 (200-day SMA) and finally 1.2000 (psychological level).
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