|Day's Range||1.139 - 1.142|
|52 Week Range||1.0655 - 1.1496|
The euro rose to a four-month high against the dollar on Wednesday on hopes European Union leaders may agree on stimulus and deepening fiscal integration to shield the economy from the pandemic. The dollar was on the defensive, particularly against other growth-leveraged currencies such as the Australian dollar, following an uptick in U.S. inflation and news of progress in vaccine development for COVID-19.
The dollar fell in North American trade on Tuesday as expectations for inflation picked up slightly and the euro rose on optimism about the possibility of a European Union stimulus package. U.S. consumer prices rebounded by the most in nearly eight years in June, according to a Labor Department report released Tuesday. "If anything, the CPI print is understating actual inflation in the U.S. economy," said Karl Schamotta, chief market strategist at Cambridge Global Payments.
The dollar fell in North American trade on Tuesday as the euro rose on optimism about the possibility of a European Union stimulus package and as U.S. stocks gained. The U.S. dollar index, which measures the safe-haven greenback against a basket of six rival currencies, was down 0.31% to 96.265. The weaker dollar was partly attributable to a move higher in the euro on hopes the European Union will agree on a rescue financing package that will limit the economic damage to the bloc from the coronavirus pandemic.
Euro has rallied again after dipping on Tuesday, but the 1.14 level continues to be difficult to overcome. I believe that we continue to see chop and a grind.
EUR/USD is attempting to print a third consecutive day of gains and is trading near highs not seen in over a month as the dollar continues to push lower.
The EUR/USD is fully rangebound. We can see that the price is going sideways in the form of rectangle which indicates no real trend.
The dollar has strengthened in early European trade Monday, with investors seeking out this safe haven after the Covid-19 outbreak forced the biggest reversal of U.S. economic reopening to date and the U.S. and China squared off over territorial disputes in the South China Sea. The number of Covid-19 cases globally has now passed the 13 million mark, according to Johns Hopkins University data, jumping by one million cases over the last five days. This has resulted in demand for the dollar as hopes of a quick economic recovery fall, with some countries, including the U.S., re-imposing lockdown measures to curb the spread of the virus.
The trend and momentum are clearly to the upside. There is also a lot of room between the current price at 1.1366 and the next main top at 1.1422.
The Euro has rallied significantly on Monday as we are looking likely to make another move to test the same resistance barrier above yet again.
The EUR/USD is in an uptrend but unable to push beyond the 1.1350 resistance (red box). This could increase the chance of a bearish ABC wave pattern.
EUR/USD has posted a third straight week of gains and is lingering near resistance that has held it lower for a month.
The Commitments of Traders reports highlight speculators positions and changes made during the week to July 7 in FX, bonds and stocks. Appetite for risk during this U.S. holiday shortened week was firm with the Nasdaq 100 rising by 3.6% while the dollar weakened against its peers.
Daily forecast and trading signals of forex majors, commodities, cryptocurrencies and indices.
U.S. stocks are set to open higher Monday, with investors optimistic over the approach of company earnings and economic data, despite the continuing unabated growth of coronavirus cases. At 7:05 AM ET (1105 GMT), S&P 500 Futures traded 25 points, or 0.8%, higher, Nasdaq Futures up 99 points, or 0.9%. The Dow Futures contract rose 230 points, or 0.9%.
The dollar has weakened in early European trade Monday, with investors turning to risk-sensitive currencies amid optimism over the upcoming earnings season even as the Covid-19 outbreak rages on. Goldman Sachs (NYSE:GS) has become a little more optimistic on earnings prospects for the S&P 500 Index this year, lifting its baseline forecast for S&P 500 earnings per share in 2020 to $115, up from a prior estimate of $110. The World Health Organization reported a record 230,370 new cases in 24 hours on Sunday.
European stock markets are set to open higher Monday, with investors looking at the possibility of more stimulus as the new earnings season kicks off. At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 1.1% higher. CAC 40 futures in France were up 1.4%, while the FTSE 100 futures contract in the U.K. rose 0.6%.
It’s a quiet day on the economic calendar. FED Chair Powell and BoE Governor Bailey are scheduled to speak. Expect Trump and COVID-19 to also influence.
(Bloomberg) -- For all its flaws, the euro zone’s gravitational pull is proving hard to resist.Croatia and Bulgaria became the latest countries to inch closer to the bloc when they got the green light on Friday to enter the so-called waiting room to join the single currency. They would be the 20th and 21st members; Romania, another former communist state, hopes to be the 22nd.Less than a quarter of century since it was created, the euro area has been repeatedly buffeted by financial meltdowns that could have easily shattered the entire project.Yet those episodes also spurred governments to allow the European Central Bank to boost its powers in an effort to keep the bloc together. That’s proved to be a strong-enough argument for some that a shared currency -- which all European Union members are technically supposed to adopt, though Denmark has an opt-out and others have resisted -- still holds appeal.“It’s a tremendous vote of confidence in the EU and the euro if more countries want to join -- it’s a confidence booster,” said Gilles Moec, chief economist at AXA SA. “It may be a bit of a headache for the central bank, but expanding the euro area should boost its credibility as a currency for the entire EU.”Croatia and Bulgaria will now spend at least two years with their currencies pegged to the euro before they can become full members.When they do, they’ll gain full access to the massive financial backstop of the ECB, which has repeatedly stepped in to calm crises. As the coronavirus pandemic hit Europe, it announced a highly flexible bond-buying program specifically to keep down government borrowing costs in stressed economies such as Italy’s.They’ll also adopt the world’s second-biggest reserve currency, replacing a Croatian kuna and Bulgarian lev that never fully won public trust. Close to 80% of savings in Croatia are in euros, and at an event last year to mark the 25th anniversary of the kuna, central bank Governor Boris Vujcic said he hoped it would never reach its 30th.The nations are essentially pursuing a policy of being stronger inside a club, and choosing to look west in doing so, as other eastern European nations did before them.Slovenia was first to join in 2007. Slovakia grappled with currency instability before it entered in 2009. The Baltic republics of Estonia, Latvia and Lithuania, after massive economic meltdowns during the global financial crisis, joined from 2011 to 2015 in part due to geopolitical concerns related to their proximity to Russia.Croatia and Bulgaria are two of the EU’s poorest members, and both rely heavily on foreign tourism that has been crushed by the pandemic. They’ve already turned to the ECB to set up swap lines to access euros.“First and foremost, it’s a part of a political process,” said Simon Quijano-Evans, chief economist at Gemcorp Capital LLP in London. “But it makes complete economic sense as well.”Convergence ConundrumStill, membership has its risks. The loss of control over exchange rates means that euro members can’t devalue their way out of a crisis. Instead, they could be forced into a damaging spiral of falling prices and wages, as happened for southern European economies in the euro zone’s sovereign debt crisis.There is little sign that euro-zone membership alone drives a convergence in living standards. Italy has yet to regain the level of economic output from 2007, before the last financial crisis. That’s one reason why enthusiasm for the currency isn’t universal.Poland, the largest EU economy outside the bloc, says it won’t consider dumping the zloty until Polish living standards are equal to those in western Europe. Hungary’s central bank wants stronger membership criteria, including higher productivity, a more mature financial system and a close alignment of economic cycles. Czech Prime Minister Andrej Babis has repeatedly said he doesn’t want to help bail out struggling nations like Italy.The ECB’s own progress report published last month showed that Bulgaria and Croatia still have plenty of work to do before they can join the euro, especially on inflation and the health of public finances. Concerns have also been raised over whether Bulgaria has adequately fought corruption and money laundering, after financial crimes hit the region in recent years.For the central bank in Frankfurt, the new entrants raise the prospect that it’ll one day be called on yet again to step into prevent a localized financial crisis from spreading to the rest of the bloc. They may have tiny economies, but Greece still came close to splintering the currency union in 2015 despite accounting for less than 2% of euro-zone GDP.For Croatia and Bulgaria, better that than the alternative.“This crisis showed us that those that are in the euro zone and its waiting room will have access to billions of euros for recovery,” said Bulgarian Prime Minister Boyko Borissov. “Those who aren’t will take on debt, and with huge interest.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Bulgaria and Croatia have been accepted into Exchange Rate Mechanism II, a precursor to adopting the euro as their currency over the next three years, the European Central Bank said in a statement on Friday. The central rate of the Bulgarian lev has been set 1.95583 against the euro while the Croatian kuna's central rate was set at 7.53450, the ECB said.
The Euro initially rally during the week, pulled back from the 200 week EMA, and then rallied again to close out a choppy week. This is normal for this pair.