EUR/USD: 21-day MA has emerged as strong hurdle ahead of the EC President vote and US data
- EUR/USD bulls need a break above the 21-day MA.
- EUR may drop if EU lawmakers reject Germany’s Ursula von der Leyen.
- A below-forecast US retail sales data could bode well for EUR/USD.
EUR/USD's corrective bounce from the July 9 low of 1.1193 seems to have stalled with the 21-day moving average (MA) proving a tough nut to crack since July 11.
As of writing, the pair is trading at 1.1262 and the 21-day MA is located at 1.1255.
Germany’s Ursula von der Leyen will face a make or break vote today in her quest to be the European Commission's first female leader.
Von der Leyen said on Monday that she would support giving the UK more time to negotiate its exit from the European Union. Further, she has pledged more ambitious carbon dioxide emissions targets, a more growth-oriented fiscal policy and taxing big tech companies, according to Reuters.
So, the common currency may come under pressure if lawmakers reject von der Leyen. The EU leaders would then need to come up with another candidate in a month.
Von der Leyen is scheduled to address the 751-member European Parliament at 07:00 GMT today, followed by a debate and a secret ballot at 16:00 GMT.
Apart from the politics, EUR/USD could take cues from German Zew surveys, due at 09:00 GMT and the US retail sales, scheduled for release at 12:30 GMT.
The EUR/USD pair will likely close above the 21-day MA today if the US data disappoint expectations, bolstering the expectations of aggressive easing by the US Federal Reserve. The central bank is widely expected to cut rates by 25 basis points later this month. The move, however, has been priced in by the markets.
The retail sales figure is expected to show the consumer spending rose 0.2% month-on-month in June, having risen by 0.5% in the preceding month.
Pivot levels