The EUR/USD pair is currently trading on the consolidated downward trend against US dollar. This could be the certain reason among US traveler restriction in Europe and last week strong US Jobs data suppress the Euro pair.  Traders awaited for U.S. inflation data and wagered a high reading could pressure the Federal Reserve to wind back policy support. The greenback has already caught a boost from last week’s strong U.S. jobs data and from recent remarks by Fed officials indicating that asset purchase tapering is on the cards. Hot inflation may also add to expectations for next year’s rate hike. The dollar is supported by long- and short-dated treasury yields, which peaked in mid-July.

On the other hand Germany’s coronavirus vaccination drive has slowed and “The bad news is that the vaccination rate has lost pace substantially,” Merkel told a news conference after the meeting. Merkel agreed that so long as the vaccines work, any further restrictions must be different to previous lockdowns. “What is clear is that this fourth wave is coming, and definitely in the autumn,” said Soeder. “The current infection rates are not sufficient to be carefree.”

The United States has not yet lifted Trump-era regulations banning most European travelers after “post-pandemic” trips for newly vaccinated tourists but the European Union has offered to lift its restrictions. The State Department is telling citizens to avoid 10 countries on the continent, and the European Union is considering closing its doors to Americans again as US cases escalate. The EU’s official recommendations are that countries on its “safe list” should not have recorded more than 75 new Covid-19 cases per 100,000 residents in the past 14 days. But US rates are too high.

The most recent data from the European Center for Disease Prevention and Control lists the United States at nearly 270 cases per 100,000 people. Those numbers, though, are out of date — last updated Aug. 1. They obscure the worst of the most recent surge. The current number is closer to 400, or more than five times the E.U. threshold, according to a Washington Post tally.

On Monday, following rumors that the EU would re-impose restrictions on American travelers, it now decided against it, and for now, Americans continue to flock to European cities and beaches, wanting to revive the tourism-starving economies. An official said the EU Council, through its member states’ coordinate policy, would continue to monitor countries, including the United States, where the “cowardly situation has worsened”. If the picture does not progress in the next two weeks, the council may remove the United States from the safe list, the official said, speaking on condition of anonymity as he did not have the authority to discuss the matter publicly.

“Traveling and mobility is fundamental for the European Union economy,” said Luís Araújo, the president of the European Travel Commission, an organization that seeks to promote travel to the European Union. Any sudden change in regulations negatively affects trust in the tourism sector, Araújo said, and the European Union may be increasingly wary of taking action that could damage the industry.

EUR/USD 4 Hour Chart:

Support: 1.1706 (S1), 1.1692 (S2), 1.1673 (S3).

Resistance: 1.1739 (R1), 1.1757 (R2), 1.1771 (R3).

Amidst this above catalysts Fed’s hot inflation expectations keeps the greenback as safe heaven while Europe’s Covid restrictions for US travelers and low vaccination counts kept Euro into downtrend. We expect a bearish trend for EUR/USD.