EUR/USD looks slightly bid around 1.0700 ahead of EMU data

• EUR/USD extends the choppiness around 1.0700 on Thursday.
• German 10-year bund yields climb further and target 2.50%.
• EMU Flash Q1 GDP Growth Rate, US weekly Claims next of note.

The single currency maintains the erratic performance in place so far this week and now motivates EUR/USD to trade with mild gains around the 1.0700 region on Thursday.

EUR/USD faces extra consolidation near term

EUR/USD adds to Wednesday’s small advance and looks to reclaim the area beyond 1.0700 the figure on a more sustainable fashion against the backdrop of a broad-based consolidative mood in the global markets.

The absence of strong drivers for the pair’s price action continues to underpin the ongoing directionless pattern, although a more cautious trade is expected to emerge in light of the release of crucial US inflation figures and the FOMC event, both due next week.

Around the ECB, there are no changes to the steady bets of a quarter-point rate raise at the bank’s gathering next week.

In the domestic calendar, another revision of the EMU Q1 GDP figures will be the only scheduled release, while weekly Initial Claims and Wholesale Inventories grab all the attention across the ocean.

What to look for around EUR

EUR/USD flirts with the key 1.0700 area amidst the generalized lack of clear direction in the global markets.

In the meantime, the pair’s price action is expected to closely mirror the behaviour of the US Dollar and will likely be impacted by any differences in approach between the Fed and the ECB with regards to their plans for adjusting interest rates.

Moving forward, hawkish ECB speak continues to favour further rate hikes, although this view appears to be in contrast to some loss of momentum in economic fundamentals in the region.

Key events in the euro area this week: EMU Flash GDP Growth Rate (Thursday).

Eminent issues on the back boiler: Continuation of the ECB hiking cycle in June and July (and September?). Impact of the Russia-Ukraine war on the growth prospects and inflation outlook in the region. Risks of inflation becoming entrenched.

EUR/USD levels to watch

So far, the pair is up 0.13% at 1.0711 and the surpass of 1.0779 (weekly high June 2) would target 1.0807 (100-day SMA) en route to 1.0879 (55-day SMA). On the downside, initial support lines up at 1.0635 (monthly low May 31) seconded by 1.0516 (low March 15) and finally 1.0481 (2023 low January 6).