- EUR/USD regains poise and looks to 1.13 on Wednesday.
- Markets’ focus remains on the pandemic vs. economic recovery.
- ECB’s De Guindos’ speech only of note in the euro area.
Following Tuesday’s negative price action, EUR/USD is now looking to re-test the 1.1300 neighbourhood amidst a mild bias towards the risk complex.
EUR/USD faces a tough hurdle at 1.1350
EUR/USD is navigating choppy waters so far this week amidst alternating risk appetite trends, while market participants keep assessing the progress of the reopening of economies in Europe vs. rising outbreaks of the coronavirus in several countries.
Recent positive results from key indicators in the euro bloc lent extra oxygen to the shared currency and the broader risk-associated space, morphing into the recent bullish move albeit capped by the 1.1350 region for the time being.
Later in the session, ECB’s Luis de Guindos will participate in an online debate on “The Pandemic Crisis in Europe: Impact, Policy Responses and the Road to Recovery” and will hold a virtual meeting at the “Consejo Empresarial Alianza por Iberoamerica (CEAPI)”. Across the pond, the only release of note will be the weekly report by the EIA on crude oil supplies.
What to look for around EUR
EUR/USD’s advance appears propped up by the better mood in the global markets, in turn sustained by optimism around the ongoing recovery post-pandemic. The constructive view in the euro, in the meantime, stays well and sound and supported by the improvement of key fundamentals in the region amidst the current (and massive) monetary stimulus by central banks. On top, the solid performance of the region’s current account is also adding to the attractiveness of the shared currency.
EUR/USD levels to watch
At the moment, the pair is gaining 0.12% at 1.1286 and a break above 1.1348 (weekly high Jun.23) would target 1.1422 (monthly high Jun.10) en route to 1.1495 (2020 high Mar.9). On the other hand, immediate contention emerges at 1.1168 (monthly low Jun.19) seconded by 1.1147 (high Mar.27) and finally 1.1043 (200-day SMA).
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