- EUR / USD looks firm and is advancing towards the 1.1780 / 85 band.
- The dollar is giving up some of the recent gains on stable returns.
- EMU current account, next final CPI to be noted in the calendar.
Single currency meets declining buyers and grows EUR / USD to the 1.1780 region at the end of the week.
EUR / USD refocuses on 1.1800
EUR / USD is managing to regain some composure and return to positive territory thanks to the slight selling pressure surrounding the dollar.
In fact, the mood of consolidation in the US bond market as well as some sense of profit taking around the greenback is supporting the current decline in the US dollar index (DXY) and making the recovery difficult. on the spot.
Despite the pair’s continued rally, the outlook for the single currency remains clouded by investor preference for the dollar amid renewed optimism about the economic recovery (based on recent results from some fundamentals) and rising bets for the dollar. Fed QE declining at some point later in the year. On the latter, it remains to be seen whether recent stronger-than-expected retail sales could trigger (astonishing?) Changes in the Fed’s message at next week’s meeting.
Later in the euro calendar, July current account results in the wider Euroland are expected, followed by final inflation figures in the bloc for August.
Across the pond, September’s U-Mich Index flash will be the only release.
What to look for around EUR
EUR / USD succumbed to selling pressure led by USD and hit multi-week lows in the mid-1.1700s on Thursday. With the accommodating “recalibration” of the ECB now in the rearview mirror, investors now appear to have turned their attention to inflation fears and the progress of the Delta variant, which, coupled with Fed speculation on the decline, should keep place under surveillance. for the moment.
Key events in the euro area this week: EMU IPC final August (Friday).
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 nervousness to the scenario. The shift of investors to European equities in the wake of the pandemic could provide additional oxygen to the single currency. ECB speculation dies down.
EUR / USD levels to watch
So far the spot is gaining 0.09% to 1.1775 and faces the next upside barrier at 1.1845 (September 14 weekly high), followed by 1.1909 (September 3 monthly high) and finally 1.1926 (SMA of 100 days). On the other hand, a break below 1.1750 (September 16 monthly low) would target 1.1704 (March 31 monthly low) en route to 1.1663 (2021 August 20 low).