Daily Analysis EURUSD - 6 July 2023

Data from the Eurozone showed positive inflation developments. The ECB Consumer Expectation revealed unchanged three-year median inflation expectations at 2.5%. The Producer Price Index declined to a negative annual rate of 1.5%, below the expected -1.3%. However, the final Eurozone June Services and Composite PMI were revised lower to 52.0 and 49.9, respectively. The Composite dropped below 50 for the first time since December, increasing recession fears. These figures weighed on the Euro. Germany will report Factory Orders, and Eurozone Retail Sales are due.

The US dollar rose on Wednesday despite a softer-than-expected Factory Orders report. The Greenback consolidated gains after FOMC minutes, which revealed some members favored a rate hike in June. US yields moved higher, with the 10-year yield reaching 4.95%, the highest level since mid-March. The focus now turns to US labor market data. On Thursday, ADP private employment report, Jobless Claims, and JOLTS will be released, followed by Nonfarm Payrolls on Friday.

The EUR/USD pair is currently trading within a descending triangle pattern, which suggests continued potential for downward pressure on the pair. At the same time, the DXY has returned to the previous resistance level, indicating a possible breakout above the significant resistance at 103.40. It is important to note that fundamental factors should be carefully considered as the main drivers of potential upward or downward movements this week, particularly given the market's uncertainty surrounding the economy and monetary policies.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1046	1.1000	1.0960	1.0860	1.0840	1.0800