EURUSD: Greenback Seeking Rise, Pushing Euro To The Edge

EURUSD is struggling. At the beginning of the month, forex trading experts wondered where the dollar’s bottom and the euro’s growth ceiling are. However, since then, the single currency has fallen in price against the US Dollar by almost 3%.

This was mainly due to a sharp change in the Fed’s interest rate forecasts, which served as a signal of an earlier tightening of monetary conditions in the United States.

At the same time, representatives of the ECB were quick to emphasize their more “dovish” attitude, noting that the United States and the Eurozone are in different situations.

According to the US Commodity Futures Trading Commission (CTFC), the sharpest reduction in USD shorts in three months was recorded last week, which was the impetus for the rise of the US Dollar.

US dollar rebalancing support

This week, Greenback has received support from end-of-month and quarter-end cash flows as investors rebalance their portfolios.

The Dollar was supported by a strong report on US consumer sentiment. In June, the indicator rose to 127.3 points, coming close to the pre-coronavirus level of February 2020 of 132.6 points. 

The rise in consumer confidence in the country indicates the willingness of citizens to spend money on goods and services, which is an important driver of the growth of the American economy.

At the same time, traders were not impressed by the data on inflation in Germany, where the growth of consumer prices in June, as expected, slowed down in annual terms to 2.3% from 2.5% recorded in May.

What’s next for the euro?

Moving ahead, much depends on what US jobs figures come out this week regarding the outlook for the Dollar as a whole. If the data does not meet expectations, risky assets will breathe a sigh of relief, and the Dollar will come under pressure.

In June, the number of jobs in private US companies increased by 692k, follows from the report published today Automatic Data Processing (ADP). Experts expected the indicator to rise by 600k.

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