- EUR/USD struggles for direction amidst risk-off mood.
- The greenback remains bid post-upbeat April CPI.
- US Initial Claims, Producer Prices next in the calendar.
Increasing volatility now prompts EUR/USD to fade the initial uptick to levels just above 1.2100 the figure and re-focus on the 1.2060/50 band ahead of the opening bell in Wall St.
EUR/USD looks fragile below 1.2100
EUR/USD run into some decent resistance in the 1.2100 neighbourhood earlier in the European session, triggering the ongoing corrective move amidst the renewed bid note around the dollar.
In fact, Wednesday’s release of higher-than-expected US inflation figures for the month of April prompted a sudden change of heart in the dollar, which remains exclusively underpinned by the pick-up in US yields.
However, the relentless vaccine rollout in the Old Continent continues to prop up growth prospects in the region, preventing at the same time a serious bearish move in the shared currency for the time being.
Later in the NA session, weekly Initial Claims will take centre stage along with Producer Prices and speeches by FOMC’s Waller and Bullard.
What to look for around EUR
EUR/USD failed once again to surpass the 1.2180/90 region so far this week, area coincident with a Fibo level (of the November-January rally). In spite of the ongoing USD-led knee-jerk, the sentiment around the single currency stays constructive on the back of the investors’ shift to the improved growth outlook in the Old Continent now that the vaccine campaign appears to have gained some serious pace and solid results from key fundamentals pari passu with the surging morale in the bloc.
Key events in the euro area this week: ECB Accounts (Friday).
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.
EUR/USD levels to watch
So far, spot is losing 0.05% at 1.2061 and a breach of 1.1985 (monthly low May 5) would target 1.1950 (200-day SMA) en route to 1.1887 (61.8% Fibo of the November-January rally). On the upside, the next hurdle is located at 1.2181 (monthly high May 11) followed by 1.2243 (monthly high Feb.25) and finally 1.2349 (2021 high Jan.6).
Share
