- The pair’s upside lost momentum near 1.1250.
- Flash EMU CPI surprised to the downside in March.
- US Retail Sales, ISM manufacturing next of relevance.
After briefly testing fresh 2-day highs around 1.1250, EUR/USD has now come under some selling pressure and sheds ground to the 1.1235/30 band.
EUR/USD now looks to US data
Sellers faded the uptick to 1.1250 after advanced inflation figures in Euroland showed headline consumer prices are seen rising at an annualized 1.4% and 0.8% when comes to prices stripping food and energy costs, both prints missing consensus.
Despite the knee-jerk in spot, the results did not come as a surprise for market participants after German flash CPI also failed to surprise on a positive way last week.
In the meantime, the pair is managing well to keep the daily gains so far against the backdrop of improved sentiment in the risk-associated space, always on the back of better-than-expected Chinese manufacturing PMI.
Moving forward, US Retail Sales are coming up next seconded by the always-relevant ISM manufacturing. On another front, investors will also follow another round of ‘indicative votes’ in the House of Commons, with results expected at some point in the European evening/night.
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’ recently following disappointing advanced PMIs in core Euroland and below-consensus German and EMU flash CPIs. 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 gaining 0.17% at 1.1235 and a break above 1.1291 (21-day SMA) would target 1.1355 (100-day SMA) en route to 1.1448 (high Mar.20). On the flip side, the next support emerges at 1.1209 (low Mar.29) followed by 1.1176 (low Mar.7) and finally 1.1118 (monthly low Jun.20 2017).
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