EURO COMES UNDER SOME PRESSURE FOLLOWING RECENT TOPS NEAR 1.0970

Euro gives away part of Friday’s gains vs. the US Dollar.

Stocks in Europe opens the week in a mixed tone.

EUR/USD meets initial resistance around 1.0970.

EMU Business Climate surprised to the downside in July.

Fedspeak will grab all the attention later in the session.

After the release of the June Nonfarm Payrolls, the Euro (EUR) faced some selling pressure, causing EUR/USD to retreat towards 1.0950 at the beginning of the week.

On this, the June employment figures catered to various interests. Individuals focused on growth would emphasize the lowest monthly job gain in 30 months (209K) and the downward adjustment of 110K for the previous two months. On the other hand, those optimistic about the resilient economy would highlight the strong hiring indicated by the household survey, a decrease in the unemployment rate, and notable growth in wages. Considering all factors, the report likely favours a 25 basis points increase in July.

Meanwhile, the US dollar (USD) is attempting a bounce after Friday's drop to 2-week lows in the 102.20 zone, as measured by the USD Index (DXY). This is occurring against the backdrop of further weakness in yields in the short end of the curve and extra gains in the belly and the long end.

The potential future actions of the Federal Reserve and the European Central Bank (ECB) in normalizing their monetary policies continue to be a topic of discussion, especially with increasing concerns about an economic slowdown on both sides of the Atlantic.

The recent robust results from key US fundamentals have reinforced the likelihood of a 25 basis point rate hike by the Fed at its July meeting. These results have continued to show a resilient US economy and a tight labour market.

On another front, data from the CFTC Positioning report for the week ended on July 3 saw the speculative community trimming their EUR net longs to levels last seen in mid-March near 143K contracts, as the single currency continued to correct lower from peaks past the key 1.1000 the figure (June 22).