USD Rally Pauses
The greenback eased up slightly against the majors in the Monday session, relinquishing the 1.47-level versus the euro and drifting back toward 110 against the yen. The US economic calendar this week consists of housing reports, expected to reveal continued softness in the sector, PPI, and the Philadelphia Fed manufacturing index. Although the US economy remains mired in its lackluster situation, burgeoning fears of a global recession have propped the greenback higher.
Euro Recovers off 6-month Low
The euro edged away from its lowest levels since late February against the greenback at the start of the week, recovering above the 1.47-level to 1.4766. The single currency's reprieve will be quickly tested given the key data slated for release. Amid growing fears that the Eurozone economy may be vulnerable to a recession, incoming economic reports will continue to be closely scrutinized to gauge the extent of deterioration in fundamentals.
In the session ahead, traders will digest Germany's July producer prices, expected to ease to 0.7% from 0.9% a month earlier but edge up to 7.5% versus 6.7% versus the previous year. Germany's ZEW survey is seen improving slightly from the 17-year low posted in July at -63.9 to -61.8 in August. Nonetheless, sentiment in the Eurozone remains dour with a recession potentially imminent.
EURUSD holds steady above the 1.47-handle, with interim resistance eyed at 1.4760, followed by 1.48 and 1.4840. Subsequent ceilings are eyed at 1.4870, backed by 1.49 and 1.4950. On the downside, support begins at 1.47, followed by 1.4670 and 1.4640. Additional losses will be tempered at 1.46, backed by 1.4550 and 1.4520.
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