EUR / USD remains depressed around 1.1670, dollar remains long

0
  • EUR / USD extends bearish note to 1.1670 area.
  • The dollar remains long and is sailing to new highs since the start of the year.
  • German producer prices rose 1.9% month-on-month, 10.4% year-on-year in July.

Selling pressure on the European currency remains unchanged for another session and prompts EUR / USD to keep business well below 1.1700 Friday’s figure.

EUR / USD could fall back to 1.1600

There is no sign of further buying interest around the single currency, although some corrective rebound could be seen in the very near term due to the pair’s oversold condition, according to the daily RSI. .

The continued improvement in the dollar has put the spot under further downward pressure, all against the backdrop of pervasive sentiment toward the safe-haven universe, which in turn appears to be supported by the resumption of volatility.

In the euro dossier, Friday’s only publication comes from the German calendar, which saw producer prices rise 1.9% per month in July and 10.4% from the previous year.

No data release expected across the pond is likely to leave global asset price action at the mercy of risk appetite trends.

What to look for around EUR

EUR / USD is trading well on the defensive and holds business near Thursday’s new 2021 lows near 1.1660, an area last visited in early November of last year. The pair’s monthly decline comes after another unsuccessful attempt to break through the difficult resistance band at 1.1880 / 1.1900 and follows the fairly solid outlook for the dollar, which remains mostly supported by lower interest rate speculation. On the euro side of the equation, the ECB’s reaffirmed accommodative stance (according to its last meeting) should keep the pressure on despite promising key fundamentals results and persistently high morale in the region.

Prominent problems on the rear boiler: Asymmetric economic recovery in the region. Sustainability of the recovery in inflation figures. Progress of the Delta variant of the coronavirus and pace of the vaccination campaign. Likely political turmoil around the EU Recovery Fund. The German elections in September could bring some political excitement to the scenario. The shift of investors to European equities in the wake of the pandemic could provide additional oxygen to the single currency.

EUR / USD levels to watch

So far the spot has lost 0.01% to 1.1673 and an allocation of 1.1665 (19 Aug 21 low) would target 1.1612 (20 Oct 2020 monthly low) en route to 1.1602 (monthly low of November 4, 2020). On the upside, the next hurdle emerges at 1.1804 (August 13 weekly high), followed by 1.1836 (50 day SMA) and finally 1.1908 (July 30 monthly high).

Share.

Leave A Reply