EUR/USD off highs, back below 1.1700 ahead of US data
- Renewed US dollar weakness offers much-needed impetus to EUR/USD.
- But meets fresh supply on downbeat Eurozone retail sales and final services PMI.
- Corrective rally to stall on upbeat US ISM non-manufacturing PMI release?
The EUR/USD pair broke its Asian consolidative phase to the upside in the European session, as the US dollar resumed yesterday’s declines. The USD index drops -0.11% to 93.91, having stalled its recovery-mode once again near 94.15 region.
However, the common currency failed to sustain the uptick above the 1.17 handle, as unimpressive Eurozone fundamentals weighed negatively on the investors’ sentiment. Eurozone final services PMI for May came in at 53.8 versus 53.9 flash reading while the bloc’s retail sales numbers arrived at 0.1% m/m in May versus +0.5% expected.
Moreover, positive sentiment seen around the European equities also dampens the demand for the funding currency Euro, as worries over the Italian political crisis ebb. The upside attempts also remain capped, as EUR bulls remain on the defensive ahead of the new Italian Prime minister (PM) Giuseppe Conte's new government confidence vote due later in parliament today.
Next of note for the major remains the US ISM services PMI and JOLTS job openings data that will be reported ahead of the European Central Bank policymaker Weidmann’s speech.
EUR/USD Technical Levels
According to Slobodan Drvenica, Information & Analysis Manager at Windsor Brokers, “Scope exists for the renewed attack at 1.1753 pivot (falling 20SMA / Fibo 50% retracement) after Monday’s rally stalled on approach. A sustained break higher would signal an end of the near-term consolidative phase and continuation of recovery from 1.1509 (29 May low) towards next targets at 1.1810 (Fibo 61.8%) and 1.1840 (falling 30SMA). Bullish outlook is expected to remain intact above 10SMA, while return and close below would soften near-term structure and risk fresh weakness. Res: 1.1708; 1.1753; 1.1810; 1.1840. Sup: 1.1681; 1.1663; 1.1641; 1.1617.”