- EUR/USD edges lower to the 1.2060/55 band on Tuesday.
- The better mood in the dollar weighs on the pair.
- US CB’s Consumer Confidence takes centre stage later in the NA session.
Following Monday’s tops beyond 1.2100, EUR/USD came under some selling pressure and now hovers around the 1.2060/50 band.
EUR/USD drops to 2-day lows
EUR/USD adds to Monday’s weakness amidst the resurgence of the demand for the greenback.
In fact, fresh concerns over the surge in coronavirus cases in Asia, particularly in India, seems to be weighing on the investors’ mood and lend renewed buying interest to the greenback, all against the backdrop of the steady performance of US yields.
Nothing scheduled in the euro docket on Tuesday should leave all the attention to the publication of the US Consumer Confidence tracked by the Conference Board and house prices measured by the S&P/Case-Shiller Index and the FHFA’s House Price Index (HPI).
What to look for around EUR
EUR/USD met some decent resistance in the low 1.2100s so far, always against the broader backdrop of the persevering selling bias surrounding the greenback. Also propping up the better mood in the European currency appears the investors’ shift to the improved growth outlook in the Old Continent now that the vaccine campaign appears to have gained some serious pace. In addition, solid results from key fundamentals pari passu with the surging morale in the bloc also collaborate with the monthly recovery in the pair (from the vicinity of 1.1700 to the boundaries of 1.2100 so far).
Key events in the euro area this week: German GfK Consumer Confidence (Wednesday) – German labour market report, flash April CPI (Thursday) – German, EMU advanced Q1 GDP, EMU flash April CPI.
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.
EUR/USD levels to watch
At the moment, spot is losing 0.19% at 1.2062 and a breach of 1.1952 (50-day SMA) would target 1.1926 (200-day SMA) en route to 1.1762 (78.6% Fibo of the November-January rally). On the other hand, the next hurdle emerges at 1.2116 (monthly high Apr.26) followed by 1.2243 (monthly high Feb.25) and finally 1.2349 (2021 high Jan.6).
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