EUR/USD accelerates its reversal from 1.1300 and dives to 1.1225

• EUR/USD fails to break above 1.1300 and retreats to daily lows at 1.1225.
• The euro fails to take advantage of USD weakness and turns negative on the day.
• EUR/USD seen appreciating towards 1.1500 in July – Westpac.

The euro has been rejected at 1.1300 earlier today and has accelerated its reversal during the US afternoon trading session. The pair’s pullback has reached session lows at 1.1225 turning negative on daily charts.

Euro upside attempts capped at 1.1300

The common currency has been unable to take advantage of the broad-based USD weakness amid the higher appetite for risk and has remained trapped within the last week’s trading range, between 1.1200 and 1.1300.

The better than expected US Non-Farm Payrolls have improved market sentiment on Thursday, curbing demand for the safe-haven dollar. US economy created 4.8 million jobs in June, beating market expectations of a 3 million increase, to register the best reading since records began in 1939.

In the Euro Area, the unemployment rate ticked up to 7.4% in May from 7.3% in April, a shorter increase than the 7.7% forecasted by the market. The impact of this indicator on the EUR/USD, however, has been irrelevant.

EUR/USD seen appreciating towards 1.1500 in July – Westpac

On a longer-term perspective, the FX Analysis team at Westpac sees the pair with potential to appreciate to 1.1500 in July, “A potentially destabilizing Eurozone problem might have fallen away now that ECB appears to have provided sufficient transparency on asset purchasing and commitments to adjust assets to be closer to regional proportionality to appease Germany’s Constitutional Court (…) EUR/USD should still find support around 1.1200 before rebounding towards the 1.15 area through July.”

EUR/USD key levels to watch