ZEW Economic Sentiment under Spotlight!
The EUR/USD extended its upward momentum for the second consecutive session and reached above the $1.2200 level. On Monday, the currency pair EUR/USD remained well supported from the weakness of the U.S. dollar and the strength in the single currency Euro. The Euro moved higher and remained firm against the U.S. dollar for the second day in a row. Europe was preparing to welcome tourists after the coronavirus lockdowns and travel restrictions. On Monday, Spain opened its borders to all vaccinated travelers that added a ray of hope to the market sentiment and pushed the riskier asset EUR/USD higher.
The lockdowns introduced around the world and European nations affected the economy of the world and all countries. The livelihood of many people was threatened after governments around the world started putting curfews, lockdown restrictions, restaurants, and tourism shutdown. This also frustrated many would-be travelers who were waiting for the lockdown to come to an end. Finally, the countries with GDP comprising a higher portion of the tourism industry, especially European nations, have unveiled plans to open up their borders for vaccinated people in summer.
This raised hopes that the European economy would return on track sooner than expected as Europe started its recovery and strengthened the single currency Euro. The rising strength of the Euro against the U.S. dollar gave further push to the already surging prices of the currency pair EUR/USD on Monday. The U.S. Dollar was weak across the board as the greenback came under pressure on inflation and interest rates concerns ahead of the release of U.S. Consumer Index data, scheduled to release on Thursday. Investors were awaiting the inflation report due later this week to know whether Federal Reserve was considering tapering the economic support measures or not. This also kept the U.S. Treasury yields lower for the day, around 1.5%and pushed EUR/USD pair higher.
On the data front, there was no data to be released from the U.S. while from the European side, at 10:58 GMT, the German Factory Orders from April dropped to -0.2% against the expected 0.4% and weighed on the single currency Euro that further caped gain in EUR/USD pair. At 13:30 GMT, the Sentix Investors Confidence for June rose to 28.1 against the expected 25.5 and supported the single currency Euro and added further strength in the EUR/USD pair.
EURUSD Intraday Technical Levels
Support Resistance
1.2162 1.2170
1.2158 1.2174
1.2154 1.2178
Pivot Point: 1.2166
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EUR/USD - Technical Outlook**
The EUR/USD is taking a bearish correction at the 1.2184 level after testing the double top resistance level of 1.2205 level. The closing of candles below this area suggests chances of a bearish correction in the EUR/USD pair. On the lower side, the EUR/USD’s next support holds around 1.2180 and 1.2149 mark. On the way to the downside, the EUR/USD will gain support above the 50 periods EMA that can be seen on the hourly timeframe. This EMA line can support the pair around the 1.2171 level.
Conversely, the pair’s resistance holds around 1.2201 and 1.2225 levels. On the news front, eyes will remain on the series of economic events, especially the German ZEW Economic Sentiment and ZEW Economic Sentiment due to be released during the European session. Economists expect a positive figure, which may help support the EUR/USD pair today. All the best!
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