Euro kicks off the week in a positive mood above 1.1000.

Euro extends the upside to the vicinity of 1.1040 against the US Dollar.

Stocks in Europe en route to close the session with decent gains.EUR/USD looks to consolidate the breakout of the 1.1000 mark.EMU Flash headline Inflation Rate extends its downward trend in July.

Germany’s Retail Sales contract 1.6% YoY in June.The Euro (EUR) extends its upward trend against the US Dollar (USD) that began on Friday, after breaking through the important 1.1000 level at the start of the week. Indeed, EUR/USD gained momentum after hitting a low of around 1.0940 on Friday, as the Greenback was undergoing a corrective move.

Looking at the bonds market, both US and European yields are trading with uncertainty as investors digest last week’s interest rate decisions by the Federal Reserve and the European Central Bank (ECB).Regarding the ECB, President Christine Lagarde has indicated that the central bank is keeping an “open-minded” approach to the upcoming September meeting and emphasized that future rate decisions will depend on economic data. Similarly, Fed Chair Jerome Powell has reiterated multiple times that the Fed’s decisions on rates will be data-dependent at the FOMC event on July 26.

In terms of speculative positioning, the net longs in EUR have remained relatively unchanged in the week ending July 25, according to CFTC. This was prior to the FOMC and ECB gatherings. During this time, spot had retreated from yearly highs around 1.1275 (July 18) to the low 1.1000s.In the Eurozone, Germany’s Retail Sales declined by 1.6% YoY in June, and the Italian Q2 GDP Growth Rate was lower than expected, with a QoQ contraction of 0.3% and YoY expansion of 0.6%. Additionally, preliminary inflation figures in the Euro area show that the Core CPI rose more than anticipated – by 5.5% YoY in July and 5.3% YoY for headline CPI. Finally, the flash Q2 GDP Growth Rate for the bloc shows that the economy expanded by 0.3% QoQ and 0.6% YoY.There are no significant data releases scheduled in the US docket for Monday.Daily digest market movers: Euro poised to some consolidation near term

The EUR picks up pace above the 1.1000 mark vs. the USD.The USD Index treads water around 101.70 on Monday.The Italian economy is expected to have contracted slightly in Q2.Markets’ attention is expected to be on the US labour market this week.

Technical Analysis: Euro looks supported near 1.0940

EUR/USD manages to gather some impulse and extend the bounce off recent lows north of the 1.1000 hurdle so far on Monday.If bears regain the upper hand, EUR/USD should put the weekly low of 1.0943 (July 28) to the test ahead of a probable move to the transitory 55-day and 100-day SMAs at 1.0908 and 1.0906, respectively. The loss of this region could open the door to a potential visit to the July low of 1.0833 (July 6) ahead of the key 200-day SMA at 1.0723 and the May low of 1.0635 (May 31). South from here emerges the March low of 1.0516 (March 15) before the 2023 low of 1.0481 (January 6).

On the other hand, occasional bullish attempts could motivate the pair to initially dispute the weekly top at 1.1149 (July 27). Above this level the downside pressure could mitigate somewhat and encourage the pair to test the 2023 high at 1.1275 (July 18). Once this level is cleared, there are no resistance levels of significance until the 2022 peak of 1.1495 (February 10), which is closely followed by the round level of 1.1500.Furthermore, the constructive view of EUR/USD appears unchanged as long as the pair trades above the key 200-day SMA.

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%).

EUR/USD retreats from daily highs, stays above 1.1000

EUR/USD climbed toward 1.1050 following the inflation and growth data from the Euro area but struggled to preserve its bullish momentum. As markets adopt a cautious stance in the American session, the pair retreats toward 1.1000 and trades in the lower half of its daily range.

EUR/USD News

GBP/USD loses traction, declines below 1.2850

GBP/USD lost its traction and turned negative on the day below 1.2850 following a bullish start to the week. The modest US Dollar strength weighs on the pair on Monday as markets hold cautious ahead of the Bank of England policy announcements and US labor market data later in the week.

GBP/USD News

Gold clings to modest gains above $1,960

Following a quiet start to the week, gold price advanced above $1,960 on Monday. In the absence of high-impact data releases, XAU/USD’s trading action remains subdued. Meanwhile, the 10-year US Treasury bond yield fluctuates in a tight channel below 4%, failing to provide a directional clue.