EUR/USD seeks direction above the 1.1800 level

The Euro is moving cautiously and holding the EUR/USD pair above the 1.18 level on Tuesday.

After five consecutive daily declines, the EUR/USD is looking to reverse that trend on Tuesday against the caution among investors ahead of Thursday’s ECB event.

All eyes are on the ECB meeting. There two topics are forecast for debate. These are the economic recovery assessment in the region and the exchange rate level. It is worth remembering that recent comments by ECB Board member P. Lane appear to have sponsored a new wave of selling around the Euro, particularly in the speculative community.

EUR/USD is moving directionless above the 1.18 level on Tuesday.

The second-quarter GDP figures for the eurozone come in better than expected.

US markets return to regular activity after the holiday on Monday.

The common currency is moving cautiously and holding the EUR/USD pair above the 1.18 level on Tuesday.

As for the eurozone data, the economy contracted less than expected in the second quarter, according to the third estimate published by Eurostat on Tuesday. The block’s quarterly figure was -11.8%, exceeding expectations of -12.1%, while the annualized figure reached -14.7% compared to the -15% expected. Meanwhile, the number of employed persons in the eurozone decreased by 2.9% quarter-on-quarter in the second quarter compared to the -2.8% expected. Earlier in the session, the German trade surplus was shown to widen to $18 billion during July.

What can we expect around the EUR?

EUR/USD managed to test the zone just above the 1.20 level earlier in the month. However, the bulls failed to extend the move, prompting a downward motion towards the area below the 1.18 level so far. The bearish view on the dollar continues to favor the underlying constructive bias in the pair in the broader picture. It is accompanied by the improvement in sentiment in the euro area. They have once further supported the vision of a robust economic recovery after the coronavirus crisis. 

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