EUR/USD: Eyes on EUR/GBP ahead of UK election and ECB

The EUR/USD pair extended its corrective slide in Asia, after having peaked at seven-month tops of 1.1285 on the back of poor NFP data-led massive USD sell-off across the board.

EUR/USD stuck in range, await fresh impetus from NFP

So far this session, the spot is seen consolidating Friday’s extensive rally, although the sellers seem to have returned last hour amid a better sentiment towards the US currency, in the wake of latest London terror attack and UK election jitters. Meanwhile, the USD index rebounds to 96.75, up 0.14% on the day, having posted fresh multi-month lows of 96.61.

The greenback slump sharply against its main competitors, after the US headlines payrolls numbers disappointed markets, showing that jobs growth moderated last month. Treasury yields also followed suit as the latest CME FedWatch tool revealed that a June rate hike probability slipped below 90%, following downbeat NFP report.

Looking ahead, it’s a big week for the EUR/USD pair, in terms of political and central banking action. Hence, all eyes remain on the EUR/GBP dynamics, with the UK election uncertainty combined with the terror attack having negative impact on the pound, while expectations of tapering hints from the ECB keeping the Euro broadly underpinned.

In the meantime, the final services PMI reports from the Euro area will be eyed for further momentum amid holiday-thinned trading ahead, while the US docket offers the ISM services PMI, factory orders and LMCI data. Most major European markets are closed today in observance of Whit Monday.

EUR/USD Technical Levels

Valeria Bednarik, Chief Analyst at FXStreet noted: “Shorter term, technical readings also lack directional momentum, but particularly the RSI indicator consolidates around 71, while a bullish 20 SMA contained the downside on Friday, now around 1.1220. Stops should be large above 1.1300, and if they get triggered, the pair has scope to advance up to the 1.1460 region this week, the level that pretty much capped rallies since January 2015. Support levels: 1.1260 1.1220 1.1180 Resistance levels1.1300 1.1345 1.1390.”