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EURUSD: euro heads south in early European trading

The EURUSD pair traded to the downside on Monday, June 28, down 0.11% to 1.1922. At the opening of the European session, the euro rose to 1.1945, and sterling jumped to 1.3939. The gains came on the back of remarks by the new British Minister of Health Sajid Javid, who said Covid restrictions would be lifted on July 19. “We cannot eliminate it, instead we have to learn to live with it,” Javid was quoted as saying.

The UK reported 22,700 new cases of coronavirus, the largest one-day spike in the past five months amid the spread of the Delta variant.

Bullish momentum faded in the EURUSD pair within three hours as buyers began to close long positions, with the euro slipping to 1.1902. The single currency may have come under pressure after a speech by ECB policymaker Robert Holzmann, who said there was no way to raise interest rates amid weak inflation, adding that PEPP will end when the Covid pandemic ends. The ECB’s asset buying program will be revised in September. By the close of European trading, the euro bulls pared all losses, but failed to extend gains.

Today’s macro agenda (GMT 3)  

  • 11:30 UK: M4 money supply, mortgage lending and net lending to individuals (May)
  • 12:00 Eurozone: economic sentiment, industrial sentiment, services sentiment, consumer inflation expectations (June)
  • 15:00 Germany: harmonized inflation rate (June)
  • 16:00 US: S&P/Case-Shiller home price index; 17:00: CB consumer confidence (June)
  • 16:40 Eurozone: ECB President Christine Lagarde speech

EURUSD: euro heads south in early European trading

Current outlook

As of writing, the euro was trading at 1.1907. Market participants await the release of NFPs to help size up the Fed’s future course of action. The market will experience high volatility until Friday, since after the Fed’s recent meeting investors have not yet decided which currencies to invest in.

The technical picture looks choppy on the hourly and 4H TFs. In order for it to turn bullish, the bulls will need to push the price action above 1.1945. For buyers to be squeezed off the market, the hourly candlestick only needs to close below 1.1890. If buyers manage to hold the price action above 1.1900 on Tuesday, we can expect to see a recovery above 1.20 by Friday.

Today’s macro highlights include three Eurozone indicators, Germany’s inflation report, as well as a speech by ECB President Christine Lagarde.

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