- EUR/USD approaches the 1.1300 barrier on Tuesday.
- USD-strength, poor data sent spot to 1.1280 on Monday.
- German Retail Sales contracted 0.4% MoM in May.
The shared currency is giving some signs of life today following the negative start of the week, with EUR/USD now trading at shouting distance from the key barrier at 1.1300 the figure.
EUR/USD now looks to data
After bottoming out in multi-day lows near 1.1280 on Monday, spot has now regained some buying interest and approaches the 1.1300 mark amidst some sideline trading in the buck.
The recent truce on the US-China trade dispute lent extra oxygen to the risk-associated complex yesterday, driving yields higher and sponsoring quick outflows from safe havens. At the same time, the positive developments from the Trump-Xi meeting somehow collaborated with mitigating speculations of a Fed move on rates in the short-term horizon.
In today’s docket, German Retail Sales contracted at a monthly 0.4% during May, while Producer Prices for the same period are due later in the European morning. Across the pond, speeches by FOMC’s Williams and Mester should keep investors focused on the buck.
What to look for around EUR
The renewed dovish stance from the ECB and USD-dynamics should dictate the price action around the pair in the near term, helped at the same time by the broad risk-appetite trends and the recent positive developments from the US-China trade front. Further out, the slowdown in the region looks unremitting and reinforces at the same time the current dovish attitude of the central bank. On the political front, Italian politics is expected to remain a source of uncertainty and volatility for EUR, with the centre of the debate always gyrating around the country’s opposition to EU fiscal rules.
EUR/USD levels to watch
At the moment, the pair is gaining 0.08% at 1.1294 and a break above 1.1412 (high Jun.25) would target 1.1419 (high Feb.28) en route to 1.1448 (monthly high Mar.20). On the other hand, the next down barrier emerges at 1.1275 (low Jul.2) followed by 1.1259 (100-day SMA) and finally 1.1181 (low Jun.18).
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