EUR/USD retreats from 4-month peaks around 1.1450, focus on ECB
- EUR/USD corrects lower from multi-month tops near 1.1450.
- The ECB event will grab all the attention later in the session.
- US Initial Claims, Retail Sales will take centre stage in the NA hours.
EUR/USD is managing well to keep business around the 1.14 neighbourhood despite posting small losses so far in the second half of the week.
EUR/USD looks to ECB, risk trends
Following four consecutive daily advances, EUR/USD is now giving away part of those gains after climbing to levels last seen in early March in the 1.1450 region on Wednesday.
In the meantime, encouraging news surrounding potential COVID-19 vaccines plus the ongoing reopening of the global economy coupled with signs of a strong rebound in some fundamentals in the region are all collaborating with the uptrend in the pair – and the rest of the risk-associated universe.
Later in the session, the ECB is expected to keep its benchmark interest rates unchanged, while further stimulus is not favoured but it should not be ruled out either.
Data across the pond includes June’s Retail Sales seconded by the Philly Fed manufacturing gauge and weekly Initial Claims. In addition, the NAHB index is due followed by TIC Flows, Business Inventories and speeches by FOMC’s Williams and Evans.
What to look for around EUR
EUR/USD clinched fresh multi-month tops in the 1.1450 region on Wednesday, opening the door to a potential move to 2020 peaks near 1.15 the figure in the near-term. As always, upbeat risk appetite trends continue to support the momentum around the euro in combination with the current recovery in the euro zon. Also supportive of a strong euro appears the solid stance of the current account in the euro area.
EUR/USD levels to watch
At the moment, the pair is losing 0.04% at 1.1407 and faces the next support at 1.1186 (61.8% Fibo of the 2017-2018 rally) seconded by 1.1168 (monthly low Jun.19) and finally 1.1147 (high Mar.27). On the other hand, a breakout of 1.1452 (monthly high Jul.15) would target 1.1495 (2020 high Mar.9) en route to 1.1514 (high Jan.31 2019).