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  • EUR/USD holds onto Friday’s recovery moves despite struggling to refresh intraday top.
  • S&P 500 Futures remains bid for third consecutive day, mixed US data cools down tapering concerns.
  • UN refrains from direct meddling in Gaza, China blames US.
  • China data, Fedspeak could entertain traders amid a likely quiet start to the week.

EUR/USD eases from the intraday top, stays around 1.2150, amid the initial Asian session trading on Monday. In doing so, the currency major consolidates Friday’s heavy gains but remains positive amid the recent risk-on mood, backed by the receding hopes of the Fed’s tapering and/or rate hikes.

Friday’s US Retail Sales and Michigan Consumer Sentiment Index offered an extra reason for the US Federal Reserve (Fed) policymakers to defend the easy money practices in America. With mixed economics raising doubts over the reflation concerns, the Fedspeak suggesting the need for “multiple data of more months” for any policy adjustments seem justified.

The same joins steady vaccinations in the West and hopes of the strong economic recovery of the pandemic to back the market sentiment in recent days.

It should, however, be noted that the bulls are worried over the Israel-Palestine tussle but have recently been relieved as the United Nations (UN) refrains from any direct meddling in Gaza, due to the US as per China. Additionally, the coronavirus (COVID-19) woes in Asia also daunt the market sentiment.

Even so, S&P 500 Futures print 0.1% intraday gains after upbeat Wall Street performance during the previous two days. It’s worth mentioning that the US dollar index (DXY) and the US 10-year Treasury yields were offered on Friday amid risk-on mood.

Looking forward, China Industrial Production and Retail Sales for April, expected 9.8% and 24.9% YoY respectively versus 14.1% and 34.2% in that order, will provide immediate direction to the market sentiment, in turn to the EUR/USD prices. However, the Fedspeak scheduled for later in the US session could be more important to watch.

Technical analysis

Unless dropping back below an ascending trend line from March 31, around 1.2080, EUR/USD remains on the way to 1.2200.


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