EUR/USD consolidates the biggest daily gains in two weeks, edges higher of late.
Covid updates sour sentiment, probe DXY pullback ahead of the key GDP signal.
US stimulus talks remain in limbo, Sino–American tussles escalate.
Housing figures, CB Consumer Confidence and pre-Fed notions are important too.
EUR/USD retreats to 1.1800, mostly unchanged on a day, heading into Tuesdays European open. In doing so, the major currency pair fails to hold the week-start optimism virus news and pre-data/events caution defends the US dollar bulls.
Traders began the key week on a positive side as weekend covid numbers from Australia and the UK helped the mood. Also, recently downbeat US data keeps a lid on the need for easy-money policies and corporate earnings season is also rosy this time, fueling Wall Street benchmarks to refresh record top.
It‘s worth mentioning though that the latest virus updates from Australia and the UK, not to forget Delta coronavirus variant woes in the US and Europe, renew market fears. Also negative for the sentiment could be the latest jostling of the US Senators as issues relating to covid funding and waters raise doubts on earlier optimistic passage. Furthermore, the escalating US-China tussles, recently over US visas of Chinese diplomats and Taiwan issues, add to the US dollar’s safe-haven demand.
Amid these plays, the US Dollar Index (DXY) remains pressured near 92.60 whereas the S&P 500 Futures drop 0.14% intraday by the press time.
Looking forward, US CB Consumer Confidence, Housing Price Index and Durable Goods Orders will be the key for EUR/USD traders ahead of Wednesday‘s Federal Open Market Committee (FOMC) meeting. While easing in housing data and downbeat Durable Goods Orders could be US dollar negative, pre-Fed fears and the coronavirus woes can keep the greenback afloat. Additionally, the Senate updates over President Joe Biden’s infrastructure spending plan and the US-China tension are extra details to take care of.
Read: Durable Goods Orders Preview: Why expectations could be too high, data useful for trading GDP
Despite struggling of late, a clear break of a monthly resistance line, now support, keeps EUR/USD bulls hopeful until the quote stays beyond 1.1790. Also challenging the pair sellers is the monthly low near 1.1750.
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