The euro recorded lower against the dollar on Friday, pending job dates from the United States. A good job report could bring the euro below 1,1800. This proves that the US economy is heading in the right direction and that it supports the Fed’s gradual withdrawal policy, which is good for the dollar.
The dollar owes its current strength to three factors: firstly, the fear of the Delta variant of the coronavirus, secondly, to technical factors and thirdly, to macro data, including from the labour market.
Investors are concerned about the spread of the COVID delta variant. In connection with this strain, the UK has delayed further opening up the economy, which also has a negative impact on the British Pound.
The euro/dollar and pound/dollar exchange rates have fallen below important support levels. For the euro, that’s $ 1.20, for sterling 1.38. These are now resistance levels and will be tested. For the euro, the level of support is now 1.1800 to 1.1830, for the pound 1.3700 to 1.3710 dollars. Below that, the picture worsens further.
Keeping a close eye on the dollar/yen is a key. The story is technical: the dollar has the resistance of 112.23 yen in its sights and if the currency goes through it, you will probably get a dollar rally.
Producer prices in the euro area in May rose by 1.3% compared to April, which was in line with expectations in advance, but significantly more than the plus of 0.9% on a monthly basis in April. On an annual basis, producer prices in the monetary union rose by 9.6%.
Employment growth in the United States in June is estimated at 706,000 as against 559,000 in May.
There are no speakers today, but a meeting is planned between German Chancellor Angela Merkel and British Prime Minister Boris Johnson.
The euro was down 0.2 percent on $ 1,1830 on Friday. The European currency recorded 0.1 percent lower at 0.8801 British pounds. The British pound fell 0.1 percent on Friday and stood at 1,3754 dollars. The dollar was down 0.1 percent at 111.46 yen.