- The EUR / USD is moving within a narrow range near the 1.22 level.
- Global markets remain in consolidation on Monday.
- Germany’s preliminary inflation figures for May will be released today.
The common currency moves without a clear direction and makes the pair EUR / USD hold within a tight range around the 1.2200 zone during the European session on Monday.
EUR / USD awaiting data
EUR / USD is moving within a narrow range near the 1.2200 level on Monday amid widespread consolidation in global markets and the absence of volatility due to the inactivity in the US markets. in commemoration of the Memorial Day holiday.
So far, the pair has managed to recover from last week’s low near 1.2130 (May 28), although the recovery has stopped at the 1.2200 area.
Meanwhile, appetite for perceived riskier assets remains cautious after Chinese PMI data fell short of expectations from the market at the beginning of the week.
The more task in the session, the focus of attention is expected to be on the publication of advanced inflation figures in Germany for the month of May. Previously, the preliminary Spanish CPI stood at 0.4% month-on-month and 2.7% annualized. Furthermore, the ECB’s M3 money supply expanded by 10.5% in the year to April and loans to the private sector increased by 3.8% in the last twelve months.
What can we expect around the EUR?
EUR / USD made fresh 4-month highs near 1.2270 over the past week before sellers subsequently dragged it to the 1.2130 region, where decent support has emerged so far. The better sentiment around the euro continues to be largely supported by improving sentiment in risk appetite and the persistent bearish stance on the dollar, all amid growing optimism about the euro area recovery, which it seems in turn supported by the firmer pace in the vaccination campaign. Additionally, better-than-expected key fundamentals, with morale rising on the block, also underpin the upbeat mood around the pair.
Key events in the eurozone this week: German Preliminary CPI (Monday) – German Labor Market Report, Eurozone Preliminary CPI (Tuesday) – German Retail Sales (Wednesday) – ECB Lagarde, Germany and Eurozone Final Composite PMI (Thursday) – Eurozone Retail Sales (Friday).
Eminent Background Issues: Asymmetric economic recovery in the region. Sustainability of the rebound in inflation figures. Progress in the vaccination campaign. Likely political turmoil around the EU Recovery Fund. German elections.
EUR / USD levels
At the time of writing, the EUR / USD pair is gaining 0.01% on the day, trading at 1.2192. The next resistance is at 1.2266 (May 25 high), followed by 1.2300 (round level) and 1.2349 (January 6 high). On the other hand, a break below 1.2132 (May 28 low) would target 1.2051 (May 13 low) on the way to 1.1985 (May 5 low).