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  • EUR/USD saw a sharp decline yesterday.
  • Poor Eurozone data is weighing on the currency.
  • Brexit and the Fed meeting can further put pressure on the single currency.
  • Technically, 1.1800 holds as strong support.

The EUR/USD fell yesterday as the Greenback bounced across the board. The European currency is showing a decline against the US Dollar after the publication of  macroeconomic reports  from the Eurozone.  According to the Statistical Office of the European Union, retail sales in the region increased by 4.6% in May 2021, analysts forecast an increase of 4.4%.

At the same time, the April indicator was revised from -3.1% to -3.9%.  The volume of retail sales on an annualized basis increased by 9% against the forecast of 8.2%.

In Germany, a decrease in investor confidence in the country’s economy was recorded.  According to the Center for European Economic Research report, the confidence index in July was 63.3 points against 79.8 points a month earlier.  The forecast provided for a decrease to 75.2 points.

Brexit concerns can weigh on EUR/USD

Meanwhile, Brussels left a hard statement that if London does not conform to Brexit agreement provisions and keeps violating the protocol of Northern Ireland, the EU can refer to court. The statement was issued by European Commission Deputy Chairman Maros Sefcovic. Any further comments can fuel negativity in the region that can press the British Pound.

Fed meeting minutes

The Fed meeting minutes are due today in the NY session. But, first, we have to find the consensus of members on policy tightening in the light of the recent US labor market report.

EUR/USD technical forecast

The EUR/USD returned to the area of “‹”‹local lows. The relative strength indicator bounced down after testing the short-term trendline in the neutral zone and aimed at the support level, signaling in favor of the weakening of the European currency. As part of the FOREX forecast EUR/USD for July 7, 2021, an attempt is expected by the bears to renew the lows and gain a foothold below the level of 1.1800.

4-hour chart of EUR/USD
4-hour chart of EUR/USD

Support levels:

S1 – 1.1780

S2 – 1.1719

S3 – 1.1658

Resistance levels:

R1 – 1.1841

R2 – 1.1902

R3 – 1.1963

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