Monday saw some strengthening of the eurozone’s currency, climbing back to test the $1.17 level after the bullish rally on dollar ended last week and the traders waited for further incentives to open new positions.
At the time of writing, EUR/USD was seen trading 0.13% higher at the price of $1.1700, while the euro corrected from the price of $1.1612 reached on Friday.
Rebound of the euro can result in testing of stronger resistance levels seen at the prices of $1.1735 or even higher at the price of $1.1765.
In case the pair returns to the long-term trend, the already tested supports may be reached at the prices of $1.1525 or even further at $1.1400 and $1.1335.
During the previous week, U.S. dollar enjoyed a very strong performance, supported by the economy data for the second quarter, confirming the outlook for the economy along with the Trump’s measures on import tariffs. Taking into account the fiscal reforms, most of the other countries hesitate to perform, in particular the European ones, traders still keep a long-term expectations in favour of the U.S. dollar.
As there are no more important data coming out on Monday for the eurozone after the trade balance showed a surplus of €16.5 billion in the month of May, only the U.S. retail sales, published by the Census Bureau, will play an important role during this session, while the expectations count on 0.4% increase for the month of June in the all-item index as well as in the core index.
In general, there are no big expectations on the market in relation to any change to a long-term trend of the EUR/USD as the U.S. currency is keeping its trend of strengthening and the monetary (as well as fiscal) policy provides substantial support for the greenback to rise further.
Worries about the international trade conditions worsening as a consequence of the import tariffs resulting in trade war possibilities are helping to support more frequent risk-off sentiments, remaining one of the reasons the U.S. dollar is strengthening against its major counterparts while the other currencies are losing markedly over these periods. The same applies for the euro, sold most of the time during such periods.
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