• EUR/USD remains consolidative in the lower end of the range.
• The German/EMU ZEW survey comes next in the docket.
• US NFIB Index, JOLTs Job Openings are due in the NA session.

The European currency regains the smile and lifts EUR/USD to the 1.1560 region on turnaround Tuesday.

EUR/USD looks to data, risk trends

EUR/USD adds to the ongoing consolidation in the first half of the week, always in the lower bound of the recent range and close to the 2021 low in the boundaries of the 1.1530 level.

Absent drivers of note, the pair looks to the broad risk appetite trends for price direction as well as the usual dynamics surrounding the buck.

The pair failed to gather further upside traction as of late despite yields of the German 10-year Bund extended the rally to levels last seen in back in late May near the -0.10%, all amidst the inactivity in the US cash market on Monday due to the Columbus Day holiday.

In the domestic calendar, the Economic Sentiment in both Germany and the Euroland measured by the ZEW survey will take centre stage in the region later in the morning. Across the pond, the NFIB Index and JOLTs Job Openings are due ahead of the more relevant inflation figures due on Wednesday.

What to look for around EUR

Despite the recent bullish attempt, EUR/USD remains well under pressure. Indeed, dollar dynamics continue to rule the sentiment surrounding the European currency and relegate the pair to trade near YTD lows for the time being. The firmer tone in the buck along with higher US yields and bouts of risk aversion – particularly on the debt ceiling issue - continue to undermine the performance of the risk universe, while the growth outlook appears under pressure on rising speculations that the inflation could take longer to reverse the ongoing elevated levels. In addition, the likely loss of momentum in the economic recovery, as per some weakness seen in key fundamentals, also caps the upside potential in the pair.

Key events in the euro area this week: German/EMU Economic Sentiment (Tuesday) – German final CPI, EMU Industrial Production (Wednesday) – European Council Meeting (Thursday) - European Council Meeting, EMU Balance of Trade (Friday).

Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the Delta variant of the coronavirus and pace of the vaccination campaign. Probable political effervescence around the EU Recovery Fund. Investors’ shift to European equities in the wake of the pandemic could lend extra oxygen to the single currency. ECB tapering speculations.

EUR/USD levels to watch

So far, spot is gaining 0.12% at 1.1563 and faces the next up barrier at 1.1640 (weekly high Oct.4) followed by 1.1652 (20-day SMA) and finally 1.1755 (weekly high Sep.22). On the other hand, a break below 1.1529 (2021 low Oct.6) would target 1.1500 (round level) en route to 1.1495 (high Mar.9 2020).