- The pair stays in the lower end of the range near 1.1260.
- The greenback advances further and approaches 97.00.
- ECB-speak will be in the limelight today.
The offered bias around the European currency remains well and sound in the first half of the week and is now pushing EUR/USD to the 1.1260/50 band, or weekly lows.
EUR/USD now looks to ECB-speakers
Spot is alternating gains with losses so far on Wednesday, coming under further downside pressure amidst the persistent pick up in the demand for the greenback in a context of souring risk appetite.
EUR, however, has managed to regain some composure on the back of the speech by ECB’s M.Draghi, who reiterated that risks for the outlook in the region keep pointing to the downside
In addition, the single currency is deriving extra downside pressure from the German money markets, where yields of the 10-year Bund dropped to fresh lows near -0.05%, area last visited in October 2017.
Later in the day, the ECB will remain in centre stage in light of speeches by Board members S.Lautenschlaeger, E.Nowotny, P.Praet, L.De Guindos and Y.Mersch.
Across the pond, the only release today will be January Trade Balance figures, the speech of KC Fed E.George (voter, hawkish) and the weekly report on crude oil stockpiles by the DoE.
What to look for around EUR
Market participants have left behind the recent and renewed dovish stance from the ECB, focusing instead on the broad risk-appetite trends, USD-dynamics and domestic data. Regarding the latter, and looking to the broader picture, the view of a slowdown in the bloc has been ‘confirmed’ last week following disappointing advanced PMIs in core Euroland. This, in turn, should add to the idea of a ‘patient for longer’ stance from the ECB. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections, where the focus of attention will be on the potential increase of the populist option among voters.
EUR/USD levels to watch
At the moment, the pair is losing 0.02% at 1.1267 and faces immediate support at 1.1246 (low Mar.27) seconded by 1.1234 (low Feb.15) and finally 1.1215 (2018 low Nov.12). On the upside, a break above 1.1313 (21-day SMA) would target 1.1361 (100-day SMA) en route to 1.1448 (high Mar.20).
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