EUR/USD: It's A Story Of A Range; Next Week's NFP Key
EUR/USD: Euro Eases to $1.12 Amid PMIs
The EUR/USD pair drifted lower during Wednesday's London session as traders took some profits from yesterday's rally, which brought the pair back to the $1.12 mark. The trend remains bullish.
Later in the session, the euro zone's final services PMIs for July are due, with the German gauge expected to move higher to 54.6 from 53.7 in June, while the French measure will most likely move back above 50 to 50.3, up from 49.9 scored in June.
Activity in the Italian services sector is expected to remain steady at 51.9 points.
The services PMI in Spain registered 54.1 points in July, down from June's 56.0 and missing the survey of 55.3.
The data will be followed by the euro zone's retail sales for the month of June, with the monthly change forecast to slow a bit to 0.1%, whilst the yearly print should improve a notch to 1.7%.
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
You agree to website policy and terms of use
It may be the most important FX cross, but the average EUR/USD level since the start of February 2015, after the ECB cut rates below zero, is 1.11, which is where it is as I write.
The average real yield difference is 8bp narrower than current levels, which suggests the euro could rally a little further. The decoupling we’ve seen coincides with the UK vote to leave the EU and the more data we get that suggests the eurozone won’t suffer economically from the uncertainty afflicting the UK, the more the EUR/USD rate ought to re-couple with relative bond yields.
But really, this is a story of a range: 1.05 to 1.17 with 1.10-1.14 holding for the last couple of months. A strong US payroll figure could change things a little, but I’m not expecting much movement in August...