- A modest USD uptick prompts some profit-taking amid overbought conditions.
- The corrective slide remained limited in the wake of disappointing US macro data.
- Tuesday’s key focus remains on the Fed Chair Jerome Powell’s scheduled speech.
The EUR/USD pair held on the defensive below the 1.1400 handle and had a rather muted reaction to disappointing US macro releases.
Having touched a fresh three-month high level of 1.1412, the pair started losing positive momentum and ticked lower through the European trading session. The downtick lacked any obvious fundamental catalyst and could be solely attributed a modest US Dollar rebound from multi-month lows.
With investors still digesting the latest dovish shift by the FOMC, traders seemed inclined to lighten their bearish USD bets ahead of the Fed Chair Jerome Powell’s speech and seemed to be the only factor prompting some profit-taking from near-term overbought conditions.
Meanwhile, the USD uptick lacked any strong conviction the wake of the latest disappointment from the Conference Board’s Consumer Confidence Index, which dropped to 121.5 for June as compared to the previous month’s downwardly revised reading of 131.3.
Adding to this, new home sales plunged 7.8% in May, missing consensus estimates by a big margin and also worse than a drop of 3.7% recorded in the previous month, while Richmond Manufacturing Index fell to 3 for June as against market expectations for a steady reading of 5.
The data, however, failed to provide any meaningful impetus as the key focus remains on Powell’s scheduled speech, which might provide some fresh clues over the possibility of a rate cut move at the upcoming July meeting and might play an important role in providing a fresh directional impetus.
Technical levels to watch