EURUSD In Temporary Calm Ahead Of Powell And Lagarde Speeches

EURUSD In Temporary Calm Ahead Of Powell And Lagarde Speeches

EURUSD In Temporary Calm Ahead Of Powell And Lagarde Speeches

The dollar pressure formed towards the last trading day of the week brought prices below the 1.22 level in the EURUSD parity. Especially in the USA, ADP private sector employment came in well above the expectations with 978 thousand people in May. On the other hand, the positive decline in weekly unemployment benefits with 385 thousand people was perceived positively in relation to the US economy. On the other hand, the US Services PMI figure of 70.4 and the ISM Service PMI of 64.0 recorded a positive momentum compared to the previous month. After all these developments, we saw a slight downward pressure on the EURUSD parity. The non-farm payrolls report, which will be announced today, especially in the USA, is the critical focus of the markets.

Regarding the developments in the Euro Zone, the 2 percent increase in the consumer price index in parallel with the May manufacturing PMI figure, which was above the expectations, was perceived positively regarding the regional economy. On the other hand, the European Union (EU) announced that it will borrow 80 billion euros within the scope of the recovery program regarding the economic consequences of Covid-19. This development created the expectation that it would provide a buffer to the economy against the Kovid-19 outbreak. While Eurozone countries, which are more cautious about Covid-19 than other countries, are in a somewhat disadvantageous position at the point of economic breakdown, ECB President Christine Lagarde announced that the ECB will support the Eurozone until it emerges from a pandemic-induced double-dip recession.

After all these developments, the dollar's activity above the 90.50 level due to the rising bond rates weakens the parity a little. Especially with the breaking of the 1.21 support level, the declines can be expected to reach the 1.2056 and 1.20 support levels. However, we are following the recovery within the framework of 1.2156 and 1.22 resistance levels, depending on the preservation of pricing above 1.21 level.

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