EUR/USD pushes higher and flirts with 1.1900 ahead of ZEW

• EUR/USD resumes the upside and approaches 1.1900.
• The German ZEW survey will be in the limelight later on Tuesday.
• Across the pond, the ISM Non-Manufacturing will be the salient release.

The single currency regains the smile and now helps EUR/USD to leave behind Monday’s pessimism and re-focus on the 1.1900 area.

EUR/USD now looks to data

EUR/USD now navigates in the area of 4-day highs in levels just shy of 1.1900 the figure on the back of the continuation of the selling bias around the greenback on turnaround Tuesday.

In fact, the mood surrounding the risk complex improves further pari passu with the corrective downside in the buck, particularly exacerbated after Friday’s Nonfarm Payrolls (850K), which reinforced somewhat the patient stance from the Federal Reserve.

Later in the euro docket, the German/EMU ZEW survey for the month of July is due, while the ISM Non-Manufacturing and final Markit’s Services PMI will be the main data releases in the NA session.

What to look for around EUR

Euro-bulls managed to regain control of EUR/USD and keep pushing spot to the 1.1900 neighbourhood, around a cent higher than last week’s lows. Price action around spot, in the meantime, is expected to exclusively follow dollar dynamics, particularly after the latest FOMC gathering underpinned prospects of higher inflation and potential tapering before anticipated. Further out, support for the European currency comes in the form of auspicious results from fundamentals in the bloc coupled with higher morale, a strong rebound in the economic activity and the investors’ appetite for riskier assets.

Key events in the euro area this week: Germany/EMU ZEW survey (Tuesday) – ECB Accounts (Thursday) – ECB’s Lagarde (Friday).

Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the vaccine rollout. Probable political effervescence around the EU Recovery Fund. German elections. Investors’ shift to European equities.

EUR/USD levels to watch

So far, spot is gaining 0.15% at 1.1877 and faces the next hurdle at 1.1895 (weekly high Jul.6) followed by 1.1975 (weekly high Jun.25) and finally 1.1997 (200-day SMA). On the downside, a break below 1.1822 (monthly low Jul.2) would target 1.1762 (78.6% Fibo of the November-January rally) and route to 1.1704 (2021 low Mar.31).