EUR/USD Fades under ECB Range Low, EUR/JPY Rejected at Resistance
- Euro walks back after weaker than expected PMI data.
- June seasonality still working against the buck, however.
Weaker than expected June PMI data from across the Euro-Zone has helped drop the Euro back towards its post-ECB meeting lows, highlighting the tepid pace of recovery in the region. While growth exists, it exists on a very finite, small level, which market participants may be taking as a sign that the door for future ECB action remains open - especially if incoming inflation forecasts weaken.
With EURUSD back below its pre-ECB range lows, it's possible that the recent Euro resiliency across the board may be finished in the short-term. EURJPY has maintained its downtrend from the May ECB meeting high, even as global equity markets are hovering at or near all-time highs.
Looking ahead to this morning in New York, there are a few pieces of data on the calendar that might further develop the US Dollar's recent turn around. Our main focus is on the shifting yield curve, which could prove to serve as a major boon to the buck in coming weeks if long-end bonds start to crack.
Have a bullish (or bearish) bias on the Euro, but don’t know which pair to use? Use a Euro currency basket.
--- Written by Christopher Vecchio, Currency Analyst
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