European households are now starting to spend more on growing positive sentiment and increased household income, boosting local business. Despite the Union's drop in GDP back in 2020, homeowners were able to become wealthier which is a good sign for the euro area. GDP is also recovering, however, is still negative at -0.3% from the start of June. Germany experienced heavier flow of business activity this month off a nice jump in PMI data as purchasing managers become more confident in the country's economy. Italy now has the lowest population relying on unemployment benefits as the overall number of furloughs in Europe has declined.
Europe's economy has been able to bring back their GDP to "normal levels" although they still struggle with other problems. Another to consider is their rising 10-year bond yields and rising yield projections in the next few years. The higher yields suggests a currency that might continue to gain value over time. 2022 is also projected to have the best GDP growth in years, and expectations are better to be bullish on than actual numbers.
EURUSD comes up near a top on the 4H after mixed PMI data last night before minor retracement. Additional resistance is above around 1.19894 after bouncing off big support. Price may make a higher low on the this timeframe and test that resistance level. However, a break under this upward trend line could be a bearish sign for the pair.
The 4H chart shows EC in a consistent sideways channel which looks like a consolidation zone. Price is currently on support at the bottom of this channel but looks like it could create a higher low. If that happens, we could expect price to hit the 200 SMA on this timeframe and test resistance.
EURJPY came all the way up to resistance and retraced on the 4H. If price can try resistance at 132.695 once more, it may have enough momentum to break above, but would be met with the pair's 200 4H SMA. This recent strong upward momentum found support on 132.150s which has maintained stability above this level so far.
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