EUR/USD slides beneath 1.0900 ahead of Eurozone PPI, Fed Minutes – Crypto News – Crypto News
Connect with us
EUR/USD remains on track to test the September 2002 low near 0.9615 – BBH EUR/USD remains on track to test the September 2002 low near 0.9615 – BBH

others

EUR/USD slides beneath 1.0900 ahead of Eurozone PPI, Fed Minutes – Crypto News

Published

2 years ago

on

Share:

  • EUR/USD holds lower grounds after snapping two-day winning streak.
  • Downbeat German data raised doubts about hawkish ECB talks and weighed the Euro amid a quiet session.
  • US Dollar managed to remain steady, bid mildly, on mixed sentiment.
  • Eurozone PPI for June, FOMC Minutes will be crucial for immediate directions.

EUR/USD remains pressured near 1.0880 as it braces for further downside amid fears of an upbeat US Dollar and softer Euro prices amid early Wednesday. Adding strength to the Euro pair’s downside performance could be the fears of softer German export data, as well as the mixed sentiment. It’s worth noting that the US Dollar’s failure to justify the previous day’s US holiday allows the Euro pair to remain firmer despite witnessing a lackluster day.

That said, the global markets were mostly inactive amid the US Independence Day holiday. Adding strength to the market’s indecision were mixed concerns about the US-China ties and a light calendar elsewhere. Further, the downbeat German data and comparatively more hawkish fed signals than from the European Central Bank (ECB) keep the EUR/USD bears hopeful.

It’s worth noting that Germany’s Exports improved to -0.1% MoM in May, from -0.5% expected and 0.7% prior but the Imports came in as 1.7% versus -1.7% prior and 3.1% expected. As a result, Germany’s Seasonally Adjusted Trade Balance dropped to €14.4B from €18.4B versus €17B.

Talking about the risks, anxiety surrounding the US-China ties escalates and weighs on the sentiment as US Treasury Secretary Janet Yellen is in Beijing. Earlier on Tuesday, the US Treasury Department said, per Reuters, “Treasury Secretary Janet Yellen had a ‘frank and productive’ discussion today with China’s Ambassador.” The news also mentioned that US Treasury Secretary Yellen raised issues of concern while also conveying the importance of the two countries working together.

It’s worth noting, however, that the Wall Street Journal (WSJ) added to the market’s cautious mood about the Sino-American ties. The WSJ stated, “The Biden administration is preparing to restrict Chinese companies’ access to US cloud-computing services, according to people familiar with the situation, in a move that could further strain relations between the world’s economic superpowers.”

On the same line, China’s President Xi Jinping said in a virtual SCO summit on Tuesday that they “should focus on practical cooperation and accelerate economic recovery.” The policymaker also added, “(They) need to strengthen strategic communication and coordination, respect each other’s core interests and concerns.”

It’s worth observing that China announced abrupt controls on exports of some gallium and germanium products, effective from August 1, which in turn has ramped up a trade war with the United States. The same could potentially cause more disruption to global supply chains, reported Reuters. That said, China’s latest retaliation is in reaction to the US curb on AI chips’ shipments to Beijing.

Amid these plays, the US Dollar printed a two-day winning streak before ending Tuesday’s North American session near 103.10 whereas the German Bunds rose while the Euro Stoxx and FTSE 100 were both down with mild losses.

Moving on, EUR/USD may witness further downside amid the return of the full markets and the looming risk-off mood. However, major attention will be given to the euro zone Producer Price Index (PPI) for May and the Federal Open Market Committee (FOMC) Minutes.

technical analysis

Monday’s bearish Doji candlestick and a failure to cross a fortnight-old descending resistance line, around 1.0910 by the press time, keep EUR/USD vulnerable to decline further. However, the 50-DMA and 100-DMA, respectively near 1.0865 and 1.0820, appear tough nuts to crack for the Euro bears.

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending