- EUR/USD loses the grip and break below 1.0800.
- Flash PMIs in Germany showed further deterioration in April.
- Eurogroup, US Claims in the limelight next in the session.
The bearish note stays well and sound around the European currency and is dragging EUR/USD to fresh weekly lows near 1.0780.
EUR/USD weaker on data, looks to Eurogroup
EUR/USD is down for the fourth consecutive session on Thursday, this time the weakness is stemming from poor results from initial estimates in Markit’s manufacturing and services PMIs in the core euro area.
In fact, PMIs in Germany, France and the broader Euroland came in well short of expectations for the month of April, reflecting the continuation of the coronavirus crisis and the initial effects of the lockdown in economies of the Old Continent.
Also reflecting the poor morale in Germany, the GfK’s Consumer Climate plummeted to -23.4 for the month of May (from April’s 2.7).
Later in the session, investors will be focused on the Eurogroup meeting, with the probability of further stimulus on top of the agenda. In fact, the European Commission is expected to unveil a €1.6 billion package aimed at providing extra funds to assist in the recovery of the region in the aftermath of the COVID-19 pandemic.
Across the pond, weekly Initial Claims will once again be in the centre of the debate.
What to look for around EUR
The euro remains on a bearish note so far this week, always looking to developments from the coronavirus and its impact on the economy and dollar dynamics as the main drivers of both sentiment and price action. On the more macro view, the single currency is expected to remain under scrutiny in the next periods in light of the forecasted contraction in the economy of the region in the first half of the year, relegating hopes of a strong recovery to Q3 and/or Q4.
EUR/USD levels to watch
At the moment, the pair is losing 0.24% at 1.0797 and faces immediate contention at 1.0784 (weekly low Apr.23) followed by 1.0768 (monthly low Apr.6) and finally 1.0635 (2020 low Mar.23). On the upside, a breakout of 1.0990 (weekly/monthly high Apr.15) would target 1.1042 (200-day SMA) en route to 1.1147 (weekly high Mar.27).
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