EUR/USD stays parked around 1.1390 post-IFO

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EUR/USD stays parked around 1.1390 post-IFO

  • EUR/USD remains near 1.1400 on mixed results from IFO.
  • DXY holding on above the 96.00 key support.
  • German IFO came in on a mixed tone.

The shared currency is trading on a positive note on Monday, taking EUR/USD to the 1.1380/90 band in the wake of IFO numbers.

EUR/USD ignores data, focus on USD, risk trends

The pair clings to its decent daily gains so far today, although a test/surpass of the critical handle at 1.1400 the figure still remains elusive for EUR-bulls.

Spot has practically ignored today’s calendar in the euro area where the German IFO showed mixed results for the month of June. In fact, Business Expectations came in short of estimates at 94.2, Current Assessment surprised to the upside at 100.8 and the key Business Climate matched expectations at 97.4.

In the meantime, and absent stronger catalysts, the pair keeps looking to the greenback and the broader risk appetite trends for direction, all ahead of the key G-20 meeting in Japan on June 28-29.

The rally in EUR has been exclusively fuelled by USD-weakness, although it is expected that sellers return to the market once the post-FOMC dust settles, as investors should start to price in the recent dovish tweak by the ECB (rate cuts and QE included).

What to look for around EUR

The renewed dovish stance from the ECB and USD-dynamics should dictate the price action around the pair in the near term, helped at the same time by the broad risk-appetite trends and trade tensions. Further out, the slowdown in the region looks unremitting and reinforces at the same time the current dovish attitude of the central bank. On the political front, Italian politics is expected to remain a source of uncertainty and volatility for EUR, with the centre of the debate gyrating around the country’s opposition to EU fiscal rules as well as the challenging tone from LN’s M.Salvini.

EUR/USD levels to watch

At the moment, the pair is gaining 0.13% at 1.1381 and a surpass of 1.1389 (high Jun.24) would target 1.1419 (high Feb.28) en route to 1.1448 (monthly high Mar.20). On the other hand, the next support emerges at 1.1350 (200-day SMA) followed by 1.1259 (100-day SMA) and finally 1.1181 (low Jun.18).

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