EUR/USD: Upside remains capped by 1.1470
- EUR/USD extends the consolidative mood around 1.1450 on Tuesday .
- European Recovery Fund gets green light from EU leaders.
- US Chicago Fed Activity Index improves to 4.11 in June.
The selling bias prevails so far around the European currency, with EUR/USD now attempting to stabilize in the 1.1450/40 band after clinching new multi-month tops earlier in the session.
EUR/USD offered post EU-deal
The buying bias in EUR/USD appears to have met quite a moderate hurdle in the 1.1470 region – or 4-month peaks – during early trade, grinding lower soon afterwards as market participants keep digesting the EU deal on the recovery fund.
Indeed, spot trades on the softer note following the ‘selling the fact’ market axiom, all after EU leaders agreed on the €750 billion recovery fund early on Tuesday after days of intense debate. The fund is aimed at helping those member states most punished by the coronavirus pandemic and consists of €390 billion in grants and €360 billion in loans.
Nothing noteworthy in the euro docket, while the Chicago Fed Activity Index surprised to the upside at 4.11 in June. Later in the NA session, the API will release its weekly report on US crude oil supplies.
What to look for around EUR
EUR/USD is slowly approaching the 2020 highs just below 1.15 the figure, always on the back of the persistent weakness surrounding the buck. As always, upbeat risk appetite trends continue to support the momentum around the euro in combination with the current recovery in the euro zone. In addition, the recently clinched deal on the European Recovery Fund help to put political fears in the region at rest.
EUR/USD levels to watch
At the moment, the pair is losing 0.13% at 1.1432 and faces immediate contention 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 opposite direction, a breakout of 1.1469 (monthly highs Jul.21) would target 1.1495 (2020 high Mar.9) en route to 1.1514 (high Jan.31 2019).