EUR/USD Analysis and Talking Points
- Euro Breaking Through YTD Low
- Parity Risk Rising for the Euro
EUR: The Euro is off to a very sluggish start with selling in the single currency picking up since the European cash equity open. Momentum on the downside has also increased since the break through the key 1.0350 area which marked the YTD and 2017 lows. While there has not been a particular catalyst that has sparked the selling this morning, a culmination of factors continues to plague the currency.
- Russian gas deliveries to Europe fell 40% in June, which in turn has kept Europe's power prices elevated. A reminder that Nord stream is set to close completely for its annual maintenance shutdown on July 11-21st, the big risk, however, is that the pipeline may not come back online.
- Elsewhere, ECB’s Nagel comments did little to aid the Euro cautioning against using monetary policy to limit risk premia of indebted states, while also stating that an Anti-Fragmentation tool can only be used in exceptional circumstances. Now while Bundesbank’s Nagel is in the minority, this does raise the risk of a watered-down Anti-Frag tool, which ultimately disappoints market expectations.
EUR/USD Chart: Intra-day Time Frame
Source: IG
Looking ahead, with little in the way of economic data from the Eurozone, the currency will likely take its cue from upcoming US data this week, with ISM Non-Manufacturing PMI scheduled tomorrow and the NFP report due at the back end of the week.
EUR/USDLevels to Watch
Resistance - 1.0340-50 (2017-2022 lows), 1.0485-90 (Jun 30/Jul 1st highs), 1.0558 (50DMA).
Support - 1.0250 (round number), 1.0210 (July 2002 peak)
| Change in | Longs | Shorts | OI |
| Daily | -14% | 9% | -4% |
| Weekly | -23% | 33% | -4% |
