- EUR/USD revisits lows in the 1.1150 region.
- USD-buying puts the pair under pressure.
- US Durable Goods Orders, Factory Orders coming up next.
The Greenback has started the week on a better footing and is now putting EUR/USD under extra downside pressure around the 1.1150 region.
EUR/USD weaker on USD strength
The pair is correcting lower after five consecutive daily advances. In addition, spot has once again failed to surpass the critical resistance area in the boundaries of 1.1180, or October’s peak.
Today, the Greenback is regaining some of its shine lost during the past week on the back of rising US yields after positive headlines from the US-China front hinted at the likelihood that a deal is closer.
Data wise in Euroland, final October manufacturing PMIs in core Euroland surpassed the preliminary readings, while the Sentix index also came in on the positive side.
Later in the session, the US docket will include September’s Factory Orders, Durable Goods Orders and the speech by S.Francisco Fed M.Daly. Closing the day, attention will also be on the speech by new ECB President C.Lagarde in Berlin.
What to look for around EUR
The pair has managed to return to the upper bound of the recent range, always on the back of the persistent selling pressure in the buck. Against this backdrop, however, a breakout of October’s high near 1.1180 remains elusive for the time being. Despite last month’s up move in spot has been exclusively sponsored by weakness in the Dollar, the outlook in Euroland remains fragile and does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the medium term at least. In addition, the possibility that the German economy could slip into recession in Q3 remains a palpable risk for the outlook and is expected to weigh on EUR in the short/medium term horizon.
EUR/USD levels to watch
At the moment, the pair is losing 0.06% at 1.1157 and a breakdown of 1.1122 (100-day SMA) would target 1.1072 (low Oct.25) en route to 1.1045 (55-day SMA). On the flip side, the next resistance lines up at 1.1179 (monthly high Oct.21) seconded by 1.1186 (61.8% Fibo of the 2017-2018 rally) and finally 1.1195 (200-day SMA).
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