Euro up versus the US dollar, but gains seemed limited

EUR/USD edged higher on Tuesday during European afternoon session, but gains seemed limited, because investors awaited European Central Bank monthly meeting this Thursday and nonfarm payroll data from United States on Friday.

The cross reached 1.3102 during late European trade, currently session high, after which consolidation followed at 1.3090. The pair was up by 0.12% for the day. Support was expected at Monday low, 1.2954, while resistance was to be met at Monday high, 1.3106.

Earlier today official report announced that Net Unemployment indicator in Spain, or the change in the number of unemployed people, dropped by 98 265 during May, above expectations that the number would dip by 50 200, while the change during the preceding period showed a decrease by 46 050. Mays results stated a decrease to the lowest level for the past six months.

Additionally, it was reported that Producer Price Index (PPI) in the Euro zone dropped by 0.6% during April on a monthly basis, marking second consecutive monthly decrease. This was the sharpest drop rate in nearly four years, as it implied that lower producer prices would not lead to rising prices of consumer goods in the coming months. Data confirmed lowering inflation in the euro region, that came along with weaker consumer demand and lower government expenditures. Producer Price Index (PPI) declined by 0.2% in April on annual basis, far from estimates, showing a 0.3% rise, while revised data from the preceding period stated a 0.6% increase.

US dollar retreated against its major peers on Monday, after disappointing ISM Manufacturing indicator in the United States, which showed a contraction in activity in this sector, with the reading below 50.0, at 49.0, the lowest value since June 2009. Expectations were dampened that FED would reduce scale of its bond purchasing program later this year.