- EUR/USD loses further momentum on poor data.
- EMU flash CPI rose 1.5% YoY during May.
- Powell, Factory Orders next of relevance in the US calendar.
The up move in EUR/USD lost momentum in the 1.1280 region, receding to the mid-1.1200s following results from the EMU calendar.
EUR/USD upside stalled ahead of 1.1280
Spot moved higher and tested fresh multi-day highs in the 1.1280 region during early trade, although the up move lacked of follow through so far, prompting the subsequent knee-jerk.
EUR also saw its march north mitigated after preliminary inflation figures in the bloc came in below expectations for the month of May. In fact, consumer prices tracked by the CPI and Core CPI rose at an annualized 1.2% and 0.8%, respectively. On the brighter side, the unemployment rate in the region ticked lower to 7.65 during April (from 7.7%).
In the meantime, the pair keeps looking to the performance around the greenback for price action amidst persistent trade concerns in the global markets and declining yields.
What to look for around EUR
Lower-than-expected preliminary inflation figures in Euroland, albeit anticipated, showed the absence of conviction in the previous up tick in consumer prices and opens the door at the same time for a potential dovish tilt at the ECB event on Thursday. On the broader picture, the broad-based risk-appetite trends and USD-dynamics should dictate the sentiment surrounding the European currency for the time being, all in combination with developments from the trade front including the US, China, the EU and Mexico. On the political front, Italian politics has resurfaced as a source of uncertainty and volatility, with the centre of the debate on the country’s opposition to EU fiscal rules.
EUR/USD levels to watch
At the moment, the pair is advancing 0.07% at 1.1247 and a breakout of 1.1277 (high Jun.4) would target 1.1283 (38.2% Fibo of the 2019 drop) en route to 1.1323 (high Apr.13). On the other hand, the next down barrier lines up at 1.1220 (55-day SMA) followed by 1.1186 (21-day SMA) and finally 1.1116 (low May 30).
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