- EUR/USD loses further ground and recedes to the 1.1820 area.
- The dollar’s rebound looks to pick up extra pace on Friday.
- US final Consumer Sentiment for the month of July next on tap.
Following earlier +2-year peaks just beyond 1.19 the figure, EUR/USD seems to have embarked on a correction lower to the current 1.1820 region at the end of the week,
EUR/USD closing its sixth consecutive week with gains
EUR/USD briefly tested the area just above the 1.19 barrier during early trade on Friday, always on the back of the persistent offered bias hurting the greenback.
In the meantime, the dollar continues to reclaim ground lost and therefore keeping EUR/USD under some modest downside pressure. Higher US yields plus oversold conditions in most of the risk complex appear among the drivers of the buck’s bullish attempt.
In the docket, the flash headline CPI in the euro bloc is seen rising 0.4% YoY, while Core CPI is expected to gain 1.2% on a year to July. Additional data in Euroland saw a historic slump in the GDP, showing the economy is predicted to contract at an annualized 15% and 12.1% inter-quarter in Q2.
Across the Atlantic, the Core PCE gained 0.2% inter-month in June and 0.9% from a year earlier. The final print of the U-Mich index will close the weekly calendar later in the NA session.
What to look for around EUR
EUR/USD recorded fresh tops just above the 1.19 yardstick at the end of the week, confirming once again the solid momentum around both the single currency and the rest of its risky peers. The sharp move up, while largely triggered by dollar-selling, has found extra sustain in auspicious results from the domestic docket, in turn supporting further the view of a strong economic recovery following the coronavirus fallout. Also lending wings to the momentum around the euro, the recently clinched deal on the European Recovery Fund helped putting political fears within the region to rest (for now), while the solid position of the current account in the region adds to the rally.
EUR/USD levels to watch
At the moment, the pair is losing 0.25% at 1.1817 and faces immediate contention at 1.1709 (38.2% Fibo of the 2017-2018 rally) followed by 1.1495 (monthly high Mar.9) and finally 1.1448 (50% Fibo of the 2017-2018 rally). On the upside, a breakout of 1.1909 (2020 high Jul.31) would target 1.1996 (high May 14 2018) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally).
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