EUR/USD extends the side-lined theme around the 1.2200 neighborhood at the end of the week.
EUR/USD now looks to ECB, US data
EUR/USD now alternates gains with losses around the 1.2200 area after testing once again the key support in the 1.2170 regions earlier in the session.
The rangebound theme in spot follows the broader consolidation in the global markets against the backdrop of the pick-up in yields on both sides of the Atlantic. In fact, yields of the US 10-year note manage to surpass the 1.60% level, while yields of the German 10-year Bund rebound to -0.16%.
Later in the session, ECB’s President C. Lagarde and Board member F.Panetta will participate in the virtual G7 Finance Ministers and Central Bank Governor’s event. In addition, Board member A.Enria will participate in an online seminar.
In the euro docket, the final Consumer Confidence tracked by the European Commission came in at -5.1 for the current month.
Across the pond, investors will closely follow the release of inflation figures measured by the PCE along with Personal Income/Spending and the final May’s Consumer Sentiment by the U-Mich index.
Markets’ attention will also be on the announcement of the multi-trillion budget by President Biden, with infrastructure and families in the center of the debate.
What to look for around EUR?
EUR/USD recorded new 4-month highs near 1.2270 earlier in the week before coming under some selling pressure to the 1.2200 neighborhood. The move higher remains largely underpinned by the improved sentiment in the risk appetite and the persistent sell-off in the greenback amidst rising optimism on the recovery in the euro area, which appears in turn supported by the firmer pace of the vaccine rollout. In addition, better-than-expected key fundamentals pari passu with the surging morale in the bloc also props up the upbeat mood surrounding the pair.
Key events in the euro area: ECB C.Lagarde.
Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the vaccine rollout. Probable political effervescence around the EU Recovery Fund. German elections.
EUR/USD Short (Sell)
ENTER AT: 1.21731