- EUR/USD is under downward pressure again.
- The dollar starts the week strong, with the DXY index above 107.00.
- Italian retail sales will be in the spotlight later in the session.
The common currency is under renewed and quite strong downward pressure and drags the EUR/USD close to the 1.0100 zone on Monday.
EUR/USD weakens on USD rally
EUR/USD starts the week on the defensive and enters its third consecutive week with lossesamid the resumption of strong bullish momentum around the US dollar.
In fact, the new dollar gains come from the hand of the Expectations of the continuation of the cycle of aggressive hikes by the Fed after another good data from the US non-farm payrolls in June (+372,000 jobs). These results, at the same time, seem to have eased the effervescence surrounding a possible “hard landing” of the US economy.
In the German money market, 10-year Bund yields dipped a bit on Mondayin line with the behavior of the US bond market.
Regarding economic data, the only notable publication in the old continent will be Italian retail sales for the month of May. Across the Atlantic, there will be a couple of short-term bill auctions and a speech by New York Fed Governor J. Williams.
What can we expect around the EUR?
The bears are keeping EUR/USD under heavy pressure and the acceleration of the decline opens the door to a likely visit to the parity level sooner rather than later.
Meanwhile, the price action around the common currency follows growing speculation about a likely recession in the euro zone, dollar dynamics, geopolitical concerns, fragmentation fears and the monetary policy divergence between the Fed and the US. ECB.
EUR/USD levels
At time of writing, the EUR/USD is down 0.76% on the day, trading at 1.0108. Next support is found at 1.0071 (Jul 8 low), followed by 1.0060 (Dec 11 2002 low) and 1.0000 (psychological level). To the upside, a break of 1.0528 (55-day SMA) would target 1.0615 (27 Jun high) on the way to 1.0773 (9 Jun high).
Source: Fx Street
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