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
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.