The new week began with the growth of stock markets in China and other trading floors, which put pressure on a safe greenback.
The USD index dipped 0.5%, reaching two-week lows around 96.8 points.
On Monday, the price of greenback fell ahead of the release of data, which is expected to show growth in business activity in the US services sector fo the month of June.
"The report for the non-manufacturing sector from ISM promises to be very interesting, especially in light of the fact that the manufacturing index rose above 50 points. At the same time, we see a risk of a slowdown in the recovery of the American economy in July and August due to the outbreak of coronavirus in such large US states as California, Texas, and Florida, which led to the introduction of quarantine, "Said Danske Bank strategists.
Over the course of a long weekend in the United States, more than 150,000 COVID-19 cases were reported, while the total number of cases in the country was close to 3 million.
The EUR / USD pair opened the new trading week higher on the weakening of the greenback on a broad front. The euro, on the other hand, is supported by signs of a recovery in the German economy, as well as hopes for additional incentives in the EU in the near future.
In May, production orders in Germany increased by 10.4% after easing the quarantine measures in the country. According to experts, this indicates that Europe's largest economy is starting to recover.
"The current data on industrial orders in Germany carries two important messages: the abolition of quarantine has led to a V-shaped surge in activity in the country, but a return to the pre-crisis level will not be easy," analysts at ING said.
With this in mind, market participants are waiting for any new signals about the creation of a pan-European fund to help the region's most affected economies by the pandemic after the meeting of eurozone finance ministers this Thursday.
Thus, the fundamental background for the main currency pair remains controversial. On the one hand, economic activity in key regions of the world is gaining momentum, which contributes to a decrease in interest in defensive assets, including greenbacks. On the other hand, the number of COVID-19 infections in the world continues to grow, which threatens to reintroduce strict quarantine measures. Therefore, the dollar may well restore previously lost positions, including against the euro.
As for the technical picture, the nearest strong resistance is located at 1.1350. A break of this mark will become a fresh trigger for the bulls and will aim EUR / USD at the round level of 1.1400. Above are annual highs, followed by a key psychological mark of 1.1500.
In case of decline, the pair will find support in the area of 1.1225–1.1230. Further, a round level of 1.1200 passes, where the breakdown of which may cause a further fall of the EUR / USD. A pullback under 1.1170–1180 will confirm a bearish breakout in the short-term with a target of 1.1100.
