In yesterday’s FX Daily we discussed how EUR/USD could have tested the 1.0670 June lows before the US core PCE event. The pair traded as low as 1.0666 in yesterday’s trading, and in our view retains a general bearish bias for Thursday’s session too, ING’s analyst Francesco Pesole notes.

US PCE to send EUR/USD closer to 1.0700

“The Euro (EUR) remains unappealing before clarity on the French vote (mind that this may not come before the 7 July second round results), and speculative yen selling is probably fueling a broader USD rally.”

“The next key levels are 1.0650 and 1.0600 for EUR/USD. Those may be reached on the back of some moves after the US debate overnight, although we expect a US core PCE at 0.1% month-on-month tomorrow to send EUR/USD into the weekend closer to 1.0700 than 1.0600.”

“Today’s eurozone calendar only includes final consumer confidence data for June, although tomorrow we’ll start seeing some June inflation prints for France, Spain and Italy. The European Central Bank calendar sees speeches by Madis Muller and Peter Kazimir, both hawkish-leaning members.”