EUR/USD turns negative around 1.0850 as risk appetite shrinks.

Euro falters just ahead of the 1.0900 hurdle vs. the US Dollar.No changes to the negative performance of stocks in Europe.EUR/USD faces extra pressure following a failed attempt to surpass 1.0900.The Euro (EUR) now comes under pressure and gives away the earlier recovery attempt to the 1.0900 neighbourhood vs. the US Dollar (USD) on Thursday.

Meanwhile, the Greenback manages to regain some balance and motivates the USD Index (DXY) to once again return above the key 103.00 hurdle helped by the positive backdrop of further upside in US yields across the curve, as market participants keep digesting the release of the FOMC Minutes of the June 14 gathering (Wednesday).

In terms of monetary policy, there are no major updates, and investor expectations remain stable regarding an anticipated 0.25% interest rate hike from both the European Central Bank (ECB) and the Federal Reserve (Fed) at their respective upcoming meetings later this month.

In the euro docket, Factory Orders in Germany expanded more than expected at a monthly 6.4% in May, while Retail Sales in the whole euro area came in flat MoM in May and contracted 2.9% from a year earlier.

Across the pond, data releases in the US labour market saw the ADP Report add 497K jobs in June (vs. 228K) expected, the weekly Initial Jobless Claims rise by 248K in the week to July 1 and Challenger Job Cuts drop by 40.709K during last month. In addition, the trade deficit narrowed to $69B in May. Finally, the ISM Services PMI improved to 53.9 in June and JOLTs Job Openings dropped to 9.8M in May.

Daily digest market movers: Euro looks depressed around 1.0850

The Euro fades the initial attempt to revisit the 1.0900 mark.

Risk appetite trends lend marked support to the pair so far.

Germany’s Factory Orders surprised to the upside in May.

Investors still see a Fed, ECB rate hike in July as the most likely scenario.

NY Fed John Williams said there is still job to be done regarding rates.

Technical Analysis: Euro poised for a deeper decline

EUR/USD keeps failing to gather serious pace, while the door remains wide open to extra losses in the short-term horizon. The pair could see its downward bias alleviated once it clears the June high at 1.1012.

That said, the loss of the weekly low at 1.0833 (July 6) could pave the way to a test of the transitory 100-day SMA at 0824. The breakdown of the latter should meet the next contention area not before the May low of 1.0635 (May 31) ahead of the March low of 1.0516 (March 15) and the 2023 low of 1.0481 (January 6).

If bulls regain the upper hand, the next hurdle is then expected at the June peak of 1.1012 (June 22) prior to the 2023 high of 1.1095 (April 26), which is closely followed by the round level of 1.1100. North from here emerges the weekly top of 1.1184 (March 31, 2022), which is supported by the 200-week SMA at 1.1180, just before another round level at 1.1200.The constructive view of EUR/USD appears unchanged as long as the pair trades above the crucial 200-day SMA, today at 0613.

EURO FAQS

What is the Euro?

The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day.

EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

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