Euro wavers as EU recovery talks hit deadlock
The euro is little changed today as traders reflected on the differences among EU leaders on the recovery fund. The talks, which began on Friday, ended without a deal about how to fund the region’s recovery from the coronavirus pandemic. A team of northern countries like Denmark, Austria, and the Netherlands said that they want to scale back grants from 450 billion euros to 350 billion. Their southern counterparts, like Spain and Italy, rejected the offer. Later today, we will continue to focus on this issue. Also, we will receive the German PPI and WPI data and a monthly report by the German central bank.
The Japanese yen eased against the US dollar as traders reacted to disappointing trade numbers from Japan. According to the statistics office, the country’s exports declined by 26.2% in June after dropping by 28.3% in the previous month. Analysts polled by Reuters were expecting the exports to fall by 24.9%. Imports, on the other hand, declined by 14.4% in June after falling by 26.2% in the previous month. Analysts were expecting the imports to fall by 16.8%. Subsequently, the trade deficit was more than 268.8 billion yen.
The US dollar strengthened slightly against key currencies as traders reflected on the rising number of coronavirus cases in the US. On Sunday, the CDC confirmed more than 65,000 new cases and more than 800 deaths in the country. That was worse than the 63,000 cases that were reported on Saturday. Analysts expect the number of new infections to continue rising as more states reopen their economies. Also, they expect that the ongoing recovery will be affected, which could lead to more actions by the Fed.
The EUR/USD pair declined slightly as traders reacted to the ongoing differences about the EU recovery fund. It is trading at 1.1425, which is slightly lower than Friday’s high of 1.1441. On the four-hour chart, the price is slightly above the 50-day and 100-day exponential moving averages. The signal and main lines of the MACD have also made a crossover. Also, the pair has formed a bullish consolidation pattern, which means that the price may resume an upward trend.
The XBR/USD pair declined slightly during the morning session. On the four-hour chart, the pair is trading at 42.98, which is slightly above the 50-day and 100-day EMAs. The price is also slightly below the ascending trend line that is shown in white. The Average True Range (ATR), which is a measure of volatility has continued to drop. Therefore, the pair is likely to remain at the current range before breaking out in either direction.
The USD/JPY pair rose to an intraday high of 107.52, which is the highest it has been since July 8. On the four-hour chart, the price is slightly above the 50-day and 100-day EMAs. It is also slightly below the 38.2% Fibonacci retracement level while the moving average of oscillator has continued to rise. Therefore, the pair is likely to continue rising as bulls aim for the next resistance at 108.00.