ECB President Lagarde Speaks!
The EUR/USD closed at $1.1848 after placing a high of $1.1885 and a low of $1.1837. EUR/USD currency pair extended its losses and continued its bearish streak for the 4th consecutive session amid the strength in the U.S. dollar. The riskier asset EUR/USD dropped to its lowest level since April 06 as market sentiment turned to risk-off behavior. The U.S. dollar was onboard solid during Thursday’s trading session amid the rising fears of Delta coronavirus and ahead of the release of U.S. NFP data. The U.S. dollar index reached its highest level in 12 weeks at 92.60 and weighed heavily on EUR/USD.
On the data front, at 11:00 GMT, the German Retail Sales in May declined to 4.2% against the expectations of 4.5% and weighed on the single currency Euro. At 12:15 GMT, the Spanish Manufacturing PMI rose to 60.4 against the expected 59.6 and supported Euro. At 12:45 GMT, the Italian Manufacturing PMI remained flat with the expectations of 62.2. At 12:50 GMT, the French Final Manufacturing PMI rose to 59.0 against the projected 58.6 and supported Euro. At 12:55 GMT, the German Final Manufacturing PMI remained unchanged with a projection of 64.9. At 13:00 GMT, the Final Manufacturing PMI from the whole bloc also remained flat with the forecasts of 63.4. The Italian Monthly Unemployment Rate dropped to 10.5% against the forecasted 10.7% and supported the single currency Euro. At 14:00 GMT, the Unemployment Rate from the whole bloc also declined to 7.9% against the projected 8.0% and supported Euro.
From the U.S. side, at 16:30 GMT, the Challenger Job Cuts for the year declined to -88.0% compared to the previous -993.8%. At 17:30 GMT, the Unemployment Claims from last week reduced to 364K against the estimated 388K and supported the U.S. dollar that added further loss in EUR/USD. At 18:45 GMT, the Final Manufacturing PMI dropped to 62.1 against the predicted 62.6 and weighed on the U.S. dollar that capped further loss in EUR/USD. At 19:00 GMT, the ISM Manufacturing PMI also declined to 60.6 against the predicted 61.0 and weighed on the U.S. dollar that capped further loss in EUR/USD. Construction Spending dropped to -0.3% against the anticipated 0.4% and weighed on the U.S. dollar that limited the declining prices of EUR/USD. The ISM Manufacturing Prices surged to 92.1 against the estimated 86.0 and supported the U.S. dollar that added further loss in EUR/USD.
Meanwhile, European Central Bank President Christine Lagarde said that the euro-zone economy might avoid the most pessimistic scenario predicted at the start of the COVID-19 pandemic. However, it still faces risks from variants mutations. ECB has started debating whether to cut back on its massive bond-buying program as the economy was recovering from its coronavirus-induced slump. Lagarde said that the improved economic outlook on rapid progress in vaccination campaigns had reduced the probability of severe scenarios. However, the emerging recovery still faces uncertainty due to the spread of virus mutations.
EUR/USD Intraday Technical Levels
Pivot Point: 1.1857
EUR/USD - Technical Outlook
The EUR/USD is trading with a bearish bias at the 1.1838 level as the major currency pair has violated the support level of 1.1850. On the downside, the breakout of 1.1845 exposes the direct currency pair towards the next support area of 1.1803 level. It’s going to be a big day for direct currency pairs like EUR/USD as the U.S. economy is due to release its unemployment rate and non-farm payroll data. These two figures are the most-awaited and high-impact economic events as these typically drive massive price action in the market. Let’s keep an eye on an immediate support level of 1.1830 level as above this, the bullish bias remains dominant, and below this, the bearish bias remains dominant. All the best!
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