- EUR / USD entered the handle of 1.17 and peaked at 1.1725 in Asia.
- The dollar is beaten across the board in Asia amid gold recovery.
- Sino-American tensions and fiscal stagnation in the United States fail to lift the dollar.
The EUR / USD has crossed above 1.17 for the first time in 22 months, bringing the cumulative monthly gain to 4.23%. The US dollar is selling across the board amid gold recovery to record levels above the September 2011 high of $ 1,921.
USD falls amid Sino-US tensions
The dollar started the week on a negative note despite the closures of consulates in China and the United States and the call by the Secretary of State of the United States, Michael R. Pompeo, for “a new alliance of democracies” to oppose the “New tyranny of China”. Such events often bode well for the US dollar, a global reserve.
This time, however, the dollar is taking a beating, possibly due to growing doubts about the US economic recovery and the political impasse in Washington. Official data released last week showed that initial claims for unemployment benefits increased for the first time since March. The weekly number of jobless claims raised concerns that the job market recovery stalls amid a resurgence of Covid-19 cases.
Further bearish pressure appears to emanate from relentless gold recovery. The yellow metal rose to a lifetime high of $ 1,930 during Asian trading hours, taking month-to-date and year-to-date gains to 8% and 27%, respectively.
Furthermore, the European Union’s recent decision to pass a landmark tax deal appears to have become a safe haven, according to a Bloomberg report.
Bullish momentum is likely to strengthen further if July’s German IFO expectations for the future exceed estimates. The publication of the data is scheduled for 08:00 GMT. Later in the day, the focus would shift to United States durable goods orders data for June.
However, traders should be on the lookout for gold as a possible corrective pullback can lead to similar movements in EUR / USD and other pairs. At press time, the pair is trading above 1.1713, having peaked at 1.1725 a few minutes before the time of publication.
Technical levels
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