EUR/USD has been extending its dollar-driven falls into the new quarter. Thursday will probably see additional falls for the currency pair, Yohay Elam, an Analyst at FXStreet, briefs.
New and old reasons to fall
“The Federal Reserve's hawkish shift in June continues underpinning the dollar, and Dallas Fed President Robert Kaplan's latest comments served as a reminder of this change. Kaplan wants to begin reducing the bank's $120 billion/month bond-buying program. He used to be the lone voice supporting tighter policy, but he was joined by others, most recently Christopher Waller earlier this week.”
“The focus on Thursday is the ISM Manufacturing Purchasing Managers' Index for June. The headline statistics is set to hold above 60, reflecting the rapid recovery, and investors will watch the employment component as a hint toward the NFP. On the other hand, the Prices Paid component, which represents inflation expectations, could ease from the record highs and weigh on the greenback. However, it may be drowned out by other greenback-positive factors. Weekly jobless claims are set to drop below 400,000 for the week that ended on June 25.”
“In the old continent, Markit's manufacturing PMIs have broadly exceeded estimates, providing some support to the common currency. On the other hand, fears of the Delta covid variant – which is highly contagious – are weighing on sentiment. Europeans' cherished summer vacations may suffer setbacks.”
“Immediate support is at the daily low of 1.1837, followed by 1.1825, which capped the currency pair in April. Some resistance is at 1.1885, which provided support early in the week. It is followed by 1.1910, which is where the 50 Simple Moving Average hits the price.”
