EUR/USD still remains capped by 1.1800 ahead of ECB, Jackson Hole

• EUR/USD stays mildly offered around 1.1760 on Thursday.
• Investors’ attention now shifts to the Jackson Hole event.
• The ECB will publish its Accounts for the latest meeting.

EUR/USD navigates a tight range around 1.1760/70 in the second half of the week and looks to extend the ongoing bullish momentum.

EUR/USD looks to the ECB, Wyoming

EUR/USD appears to have met some decent resistance beyond 1.1770, or weekly highs, on Wednesday.

The generalized better tone in the risk-associated universe has been weighing on the dollar since the beginning of the week, sponsoring at the same time the bounce in spot from new YTD lows near 1.1660 (August 20).

The single currency manages well to leave behind disappointing figures from flash PMIs in the core Euroland as well as mixed readings from the German IFO survey. Earlier in the session, the German Consumer Confidence tracked by GfK missed estimates at -1.2 for the month of September (from -0.4).

Later in the domestic calendar, the focus of attention will be on the release of the ECB Accounts of the July meeting, while Initial Claims and the second revision of Q2 GDP will be in the limelight across the pond.

What to look for around EUR

The recovery in EUR/USD seems to have met initial and quite moderate hurdle in the 1.1770/75 band for the time being, leaving intact the next target at the 1.1800 neighbourhood. The ongoing recovery in the pair from yearly lows tracks the improvement in the risk complex as well as the corrective downside in the buck. However, the re-affirmed dovish stance from the ECB (as per its latest meeting) is expected to keep spot under pressure despite the healthy economic recovery in the region, which in turn stays propped up by the high morale among market participants.

Key events in the euro area this week: German GfK Consumer Confidence, ECB Accounts (Thursday).

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. German elections in September could bring some political effervescence to the scenario. Investors’ shift to European equities in the wake of the pandemic could lend extra oxygen to the single currency.

EUR/USD levels to watch

So far, spot is losing 0.10% at 1.1759 and a breakdown of 1.1663 (2021 low Aug.20) would target 1.1612 (monthly low Oct.20 2020) en route to 1.1602 (monthly low Nov.4 2020). On the upside, the next resistance is located at 1.1804 (weekly high Aug.13) followed by 1.1814 (50-day SMA) and finally 1.1908 (monthly high Jul.30).