- EUR / USD lost some gains and fell in the sub-1.1200 area.
- The dollar finds some support as the mood of risk ebbs somewhat.
- The ECB is expected to announce further stimulus measures at its meeting.
The corrective drawback of shared currency means that EUR / USD to give up some of its recent solid gains and return to levels below the 1.1200 mark.
EUR / USD turns to ECB, data
After seven consecutive daily advances, including new 3-month highs beyond 1.1250 (Wednesday), EUR / USD is now under some selling pressure and is falling in the sub-1.1200 area.
The sellers of the pair intervened in the following overbought conditions (according to the daily RSI) and as the recent surge in riskier assets seems to be pausing. The underlying bullish view of the risk complex, however, is still supported by the relentless return to some kind of normalcy in global economies.
Later in the session, the ECB meeting will draw attention, with the consensus expecting the central bank to unveil additional stimulus measures to help economies recover from the fallout from the coronavirus.
On the other side of the pond, the usual initial weekly demands will be in the spotlight, supported by the figures from the trade balance.
What to look for around the EUR
EUR / USD rose above 1.1250 at the start of the week in a context of good humor in the risk universe. As usual, the weak dollar and the positive outlook following the gradual reopening of economies around the world confirm investors’ preference for riskier assets. In addition, Germany plans to inject an additional € 100 billion into its economy, in addition to the recently proposed aid of € 750 billion conditioned by the European Commission (EC). The continued support for the euro is also due to the solidity of the region’s current account.
EUR / USD levels to watch
Currently the pair is down 0.27% to 1.1203 and faces immediate contention at 1.1012 (200 day SMA), followed by 1.0912 (55 day SMA) and finally 1.0870 (weekly low May 26). On the other hand, a break out of 1.1257 (highest monthly / monthly on June 3) would target 1.1391 (highest monthly on June 1, 2019) and move towards 1.1412 (highest monthly on June 25, 2019).