EUR/USD is sliding towards weak support in the wake of the new week. Markets have one eye on Iraq and another on the world cup. An attempt to move higher resulted in a drop. Final inflation figures from the euro-zone are awaited. Wednesday’s Fed decision is also beginning to impact markets.
Here is a quick update on what’s moving the pair.
- EUR/USD stabilized on higher ground after the move in the US session.
- Current range: 1.350 to 1.3550.
Further levels in both directions:
- Below: 1.35, 1.3450, 1.34 and 1.3325.
- Above: 1.3550, 1.3585, 1.3650, 1.3677 and 1.37.
- 1.35 strengthens as support.
- 1.3550 is an immediate resistance line. 1.3585 is next and is stronger.
- 9:00 Euro-zone CPI. Exp. +0.5%. Core CPI exp. 0.7%.
- 13:00 US TIC Long-Term Purchases. Exp. +41.3 billion.
- 13:15 US industrial output. Exp. +0.6%.
- 13:15 US Capacity Utilization Rate. Exp. 78.9%.
- 14:00 US NAHB Housing Market Index. Exp. 47 points.
*All times are GMT
- Eurozone inflation could dig the bottom: Even though the ECB has already made its decision, inflation data remains of importance for the next moves. French and Spanish inflation numbers remain weak, and we could see a downgrade in the final euro-zone CPI for May, keeping the pressure on the ECB. Current figures are at rock bottom cycle levels. A dip below these levels could add pressure on the euro.
- The US consumer is not enthusiastic: The American consumer is not so active as expected in the second full month of the spring. With the US economy reliant on consumption, this isn’t encouraging. Also consumer confidence fails to impress.
- Euro weighed by yield differential: The impact of Draghi is still felt on markets: yields in the euro-zone are low and they are beginning to be in contradiction with other regions: the BOE’s Mark Carney said that UK rates will rise sooner than current expectations and this boosted the pound. EUR/GBP fell below 0.80. In New Zealand, the hawkish central bank hints at more hikes. On this background, the easing ECB could push the euro even lower. We will get the US rate decision next Wednesday..
Further reading: EUR/USD Drops to Revisit Four-Month Lows around 1.3500 Support