EUR/USD advances towards 1.1900, snaps three-day downtrend ahead of busy calendar day
- EUR/USD takes the bids to refresh daily high, consolidates weekly loss.
- DXY remains offered for third day amid mixed sentiment ahead of the key data/events.
- EU Retail Sales, US ADP Employment Change and ISM Services PMI to decorate today’s calendar.
- Fedspeak, covid updates and stimulus news also need trader’s attention.
EUR/USD reverses weekly losses, refreshing the daily top to 1.1875 heading into Wednesday’s European session. In doing so, the major currency pair snaps a three-day fall with a 0.10% intraday upside amid broad US dollar weakness ahead of important Eurozone and the US data.
EUR/USD seems to prepare for a long heavy economic line while consolidating the latest losses even as the stock futures and Treasury yields portray the market’s indecision. That said, the S&P 500 Futures drop 0.10% intraday whereas the US 10-year Treasury yields add one basis point (bp) to 1.18% by the press time.
The escalating Delta covid variant woes in the US and deadlock over President Joe Biden’s infrastructure spending plan in the Senate sours the risk appetite of late. Also in the line were the hawkish Fed chatters following the stronger-than-expected US Factory Orders. Furthermore, the recent jump in virus infections in China and Australia battles the easy COVID-19 data from the UK to trouble the traders. Additionally, geopolitical concerns over Iran and China, as well as Beijing’s crackdown on technology stocks offer an extra burden on the mood.
On the contrary, New York Times’ news suggesting the US Food & Drug Administration’s (FDA) readiness to give final approval to the Pfizer covid vaccine keeps the traders hopeful. Also, recently positive data from the US and the EU, as well as broad optimism that the Western economies, coupled with the Asia-Pacific ones, will be able to overcome the pandemic favor the bulls.
It should be noted, however, that today’s Composite PMI for Germany and the bloc, as well as EU Retail Sales, for July and June respectively, will offer immediate direction to the EUR/USD prices. While a reduction in the region’s Retail Sales from 9.0% to 4.5% YoY could probe the pair buyers, anticipated strength in the US ADP Employment Change and ISM Services PMI for July can recall the pair sellers afterward.
Above all, risk catalysts can keep directing short-term EUR/USD moves, mostly to the south, ahead of Friday’s US Nonfarm Payrolls (NFP), for which ADP data serves as an early signal.
Technical analysis
EUR/USD grinds higher towards a 200-day EMA level of 1.1916 until staying beyond 1.1850–35 support-zone established since June 18.