- EUR/USD follows the broader side-lined mood on Tuesday.
- German 10-year yields drop to multi-week lows near -0.23%.
- German, EMU Economic Sentiment disappointed markets in June.
The single currency keeps the offered note unchanged so far and motivates EUR/USD to remain within the daily consolidative stance around the 1.2170 zone.
EUR/USD focused on ECB, US data
No news on the pair so far, as it keeps navigating within a narrow range and follows the generalized cautious note ahead of key events on both sides of the Atlantic later in the week.
In the meantime, the economic recovery in the Old Continent, the vaccination campaign and chatter about a potential move of the ECB on the PEPP at its event on Thursday seems to dominate the investors’ sentiment.
In the domestic calendar, the ZEW survey came in on the soft side in June after the Economic Sentiment in both Germany and the broader euro bloc missed consensus and eased to 79.8 and 81.3, respectively.
Across the pond, the NFIB Index eased a tad to 99.6 in May, while the trade deficit shrank to $68.9 billion in April. Later in the session, the JOLTs Job Openings is due seconded by the API’s weekly report.
What to look for around EUR
Last week’s sell-off in EUR/USD met solid support around the 1.2100 neighborhood. The subsequent bounce manages to re-test the key 1.2200 level, leaving the perspective on the positive side at least in the very near-term. Looking at the broader scenario, the constructive perspective in the European currency stays in place and appears propped up by auspicious results from fundamentals in the bloc coupled with higher morale, prospects of a strong rebound in the economic activity in the Old Continent in the months to come and the investors’ appetite for riskier assets.
Key events in the euro area this week: ECB meeting (Thursday).
Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the vaccine rollout. Probable political effervescence around the EU Recovery Fund. German elections. Investors’ shift to European equities.
EUR/USD levels to watch
So far, spot is losing 0.11% at 1.2175 and a break below 1.2063 (23.6% Fibo retracement of the November-January rally) would target 1.2051 (weekly low May 13) en route to 1.1985 (monthly low May 5). On the upside, next hurdle is located at 1.2266 (monthly high May 25) followed by 1.2300 (round level) and finally 1.2349 (2021 high Jan.6).
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