EUR/USD Nudges Higher Overnight

Broader USD weakness buoyed EUR/USD in Asia, leaving the rate 15 pips better off at ~$1.1880 ahead of London hours, just a couple of pips shy of yesterday's high, with liquidity returning to broader markets as the U.S. returns from its elongated weekend.

• Late Monday comments from ECB's de Guindos highlighted the need to monitor any partial second-round effects of the recent inflationary dynamic, while he affirmed the general view that the jump in prices will prove to be transitory. Elsewhere, the final round of June services & composite PMI surveysfor the continent proved to be a touch firmer than the flash estimates on net, although this provided little impetus for markets.
• From a technical perspective bulls still need to clear the Jun 30 high ($1.1909) before switching their focus higher towards key short-term resistance in the form of the Jun 25 high ($1.1975). To the downside, bears target the Jul 2/Apr 6 lows ($1.1808/1795).
• The latest German ZEW survey & factory orders data are set to headline the economic docket on Tuesday, with Eurozone retail sales data also due. In terms of ECB speakers, we are set to hear from de Guindos, de Cos & Visco. The widely discussed ECB gathering also gets underway today, with the Bank's strategy review set to dominate matters at a set of meetings scheduled for the coming weeks. BBG sources have suggested that an announcement on the matter could come as soon as this week if the final hurdles surrounding the matter are cleared.
• In terms of notable option expiries at today's 10AM NY cut, focus will fall on the following: $1.1865-80 (EUR1.6bn), $1.1900-10 (EUR1.6bn). Further out attention will be on the following expiries over the coming days: Jul 07 $1.1917-24 (EUR1.5bn), $1.1935-50 (EUR1.1bn); Jul 08 $1.1930-50 (EUR1.9bn); Jul 09 $1.1885-00 (EUR1.2bn)