- EUR/USD trades within a rangebound theme near 1.1300.
- Investors keep looking to the risk trends for direction.
- ECB’s President Christine Lagarde speaks later on Monday.
EUR/USD is struggling for direction in the 1.1300 area at the beginning of the week following last Friday’s moderate pullback.
EUR/USD looks to risk trends, Lagarde
After recording fresh 3-month peaks near 1.1400 the figure on Friday, EUR/USD sparked a correction lower to the 1.1280 region, where it seems to have met decent contention for the time being.
In the broader picture, the single currency continues to monitor the progress of the return to the normal activity in the Old Continent, while key tourism flows are expected to resume in the next couple of weeks. It is worth mentioning that the strong rebound in the pair was on the back of renewed and improved appetite for riskier assets.
Also supporting the risk-on mood, the ECB increased its PEPP by €600 billion at its meeting last Thursday, which has also lent extra legs to the rally.
Data wise in Euroland, the Sentix Index, which gauges the Investors’ Confidence in the region, will be the only release later on Monday. In addition, ECB’s C.Lagarde will participate at a virtual hearing before the European Parliament.
What to look for around EUR
EUR/USD has clinched fresh tops near the 1.1400 mark on Friday against the backdrop of increasing appetite for riskier assets. The rally in the euro remains well sustained by the gradual and relentless re-opening of economies in Europe and by the ongoing monetary stimulus announced by the ECB, Germany and the European Commission. 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 advancing 0.16% at 1.1307 and a breakout of 1.1383 (weekly/monthly high Jun.5) would target 1.1391 (monthly high Jun.13 2019) en route to 1.1412 (monthly high Jun.25 2019). On the downside, the immediate support aligns at 1.1186 (61.8% Fibo of the 2017-2018 rally) seconded by 1.1015 (200-day SMA) and finally 1.0936 (55-day SMA).
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