EUR/USD: Euro Shows Signs of Fatigue in 8th Green Day in a Row. Can It Hold the Line at $1.17?
1 min read
Key points:
- Euro dances around flatline
- $1.17 seems tough to uphold
- This week: packed agenda
Prospects of a rate cut are clearing up (or, more precisely, investor expectations) and that’s pushing the dollar lower. Among other things.
✨ Euro Climbs Again but Slows Down
EURUSD is struggling to squeeze out an eighth straight day of gains Monday, peaking at $1.1730, a level not seen since September 2021 — but the rally’s stamina is now under the microscope. - The greenback’s slip is mostly about shifting Fed expectations: traders see a clearer path for rate cuts — a trim likely coming in September — which has been pushing the dollar lower and lifting the euro together with its forex peers.
- Against this backdrop, technical traders are watching for any cracks at this level — the pair needs to hold the line at $1.17 or risk a short-term pullback after its current (and impressive) streak.
🦢 Dollar Softness Driving the Narrative
- Investors continue to dump the dollar as the rate-cut story gains traction, helped along by somewhat favorable inflation data and a general risk-on mood in equities and crypto.
- While the euro has capitalized on this dollar fatigue, the pair could see some choppy sessions if US data later this week changes the rate outlook narrative again.
- For now, the euro is on track to close out June with a solid 3% run — but the market wants to see if the upside can extend into Q3.
🚰 What’s on Tap This Week?
- Buckle up for a data-packed week: Tuesday brings Fed Chair Jay Powell’s speech, plus the ISM Manufacturing PMI, both of which could swing rate expectations yet again.
- Thursday has a double whammy: an early close for the long holiday weekend but not before the crucial nonfarm payrolls report — with markets expecting 120,000 jobs added in June, down from May’s 139,000, and the unemployment rate to tick up to 4.3% from 4.2%.
- Friday is lights out for US equity markets with July 4th celebrations, so FX traders may front-load positions, adding more fuel to intraday swings in the euro-dollar pair.