- EUR/USD trades on the defensive and slips back to 1.1240.
- The dollar looks bid and weighs on the pair’s outlook.
- EMU’s Trade Balance figures, US Empire State Index in the limelight.
The single currency has started the week on a negative note and is now dragging EUR/USD to daily lows in the 1.1230/25 band.
EUR/USD weaker on USD-buying
EUR/USD is retreating for the third consecutive session at the beginning of the week, prolonging at the same time the rejection from monthly peaks near 1.1420 recorded on June 10.
On the opposite side, the greenback extends its recovery and looks to reclaim further ground following the sharp sell-off that started in mid-May and dragged the US Dollar Index (DXY) to fresh 3-month lows during last week.
Data wise in the region, Trade Balance figures for the broader euro zone will be the main release later on Monday. Across the pond, the Empire State Index is due in first turn seconded by TIC Flows and the speech by San Francisco Fed M.Daly (2021 voter, centrist).
What to look for around EUR
EUR/USD has opened the week on a weak fashion on the back of further rebound in the demand for the buck. The constructive view in the euro, however, 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 losing 0.11% at 1.1242 and faces the next support at 1.1212 (monthly low Jun.12) seconded by 1.1186 (61.8% Fibo of the 2017-2018 rally) and finally 1.1022 (200-day SMA). On the other hand, a break above 1.1422 (weekly/monthly high Jun.10) would target 1.1448 (50% Fibo of the 2017-2018 rally) en route to 1.1495 (2020 high Mar.9).