- EUR / USD returned below 1.1900 on Tuesday.
- German 10-year yields rise to highs near -0.16%.
- Jerome Powell’s presentation is coming.
EUR / USD continued to move weakly and fell to 1.1879, marking a new low for Tuesday. The price then bounced but remained below 1.1900.
EUR / USD weaker, focuses on Powell
The EUR / USD is yielding part of the advance registered after the start of the week and has now returned below 1.1900, before a strengthening of the dollar in the market.
Monday’s rally was coupled with a rally in stocks and a moderate rise in yields on the German 10-year benchmark and profit-taking against the dollar. However, on Tuesday, the dollar picked up pace again.
With regard to data, it was known in the Eurozone that industrial sales in Italy rose 3.3% in April. The European Commission will release its advanced consumer confidence indicator for the current month later on Tuesday.
In the US the spotlight is on Jerome Powell’s presentation to Congress. In his initial statement, he pointed out that the recent rise in inflation is temporary. Regarding data, the report on the sale of existing homes will be published.
What to see around the EUR / USD
The EUR / USD rally lost momentum at the 1.1930 zone for the time being. The price action around the pair is expected to exclusively follow the dynamics of the dollar, at least in the very short term and particularly after what the last meeting of the Federal Reserve left. Meanwhile, the support for the European currency comes from the expectation in the fundamentals that arise from the strong rebound in economic activity and the appetite of investors for riskier assets.
Key events in the Eurozone this week: Consumer Confidence (Tuesday) – PMI – (Wednesday) – Germany IFO Survey (Thursday) – German GfK Consumer Confidence, European Council meeting (Friday).
Issues to consider: Asymmetric economic recovery in the region. Sustainability of the rebound in inflation figures. Vaccination progress. Likely political tension around the European Union Recovery Fund. German elections. Change in investors towards European stocks.
Technical levels
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