- Improving EU Data
- German Bundestag Boost
- Risk Aversion Amid COVID-19
EUR/USD sell-off, after an unexpected rise Monday morning, persisted on Tuesday as the Euro came under pressure amid a stronger U.S dollar. The pair had initially risen to three-week highs as a plethora of better than expected economic releases, fuelled a buying spree on the Euro.
The single currency has since shed all the gains registered on Monday with the EUR/USD pair tumbling to one-week lows.
Time : 06-30-2020
Pivot : 1.1248
Technical View : Short Below 1.1228
Target : 1.1208 next 3 targets are 1.1193, 1.1174 and 1.1134
Comments : Weak Bearish
Last Price : 1.1202
The Euro rose higher on Monday morning as better than expected German consumer inflation data indicated that Europe’s biggest economy is on a recovery path. The CPI rose 0.6% in June, with the yearly rate surging to 0.9% from 0.6%.
Eurozone Economic Sentiments also rose to 75.7 in June from 67.5 in May, affirming economic recovery following COVID-19 disruption. The Euro also received a boost on the German Bundestag, concluding that the European Central Bank can move forth with its stimulus program after questioning it initially.
The remarks by the German Court means the ECB can move forth and boost its Pandemic Emergency Purchase Program designed to revitalize the struggling Eurozone economy. There is already an indication that the ECB could move forth and increase the program by a further €1 trillion as focus shifts towards stabilizing the inflation level.
Amidst a string of positive developments across the Eurozone, Euro remains under pressure against Greenback on the ever-growing concerns about COVID-19. With a second wave rattling the U.S economy as well as China, traders are increasingly turning to safe havens sending the U.S dollar higher against the majors.
A strengthened dollar is the latest catalyst fuelling a sell-off of the EUR/USD pair that had started the week on a roll. Tuesday promises to be yet another busy trading session for the pair with a speech from Federal Reserve Chair Jerome Powell poised to sway traders’ sentiments on the dollar conversely the EUR/USD. Similarly, the markets wait to hear what the U.S Treasury Secretary will say later in the day.