- EUR/USD is looking to rebound from recent lows in sub-1.1200.
- Focus in Europe will be on the EU Leaders Summit.
- German Producer Prices contracted 0.4% MoM and 2.2% YoY.
The selling pressure around the single currency appears to have subsided somewhat on Friday, with EUR/USD so far managing well to reclaim the 1.1200 mark and above.
EUR/USD looks to the EU Summit
Following three consecutive daily pullbacks, EUR/USD has managed to regain some buying interest near 1.1180, area coincident with a Fibo level of the 2018-2018 rally, on the back of the steady/offered stance in the greenback.
In the meantime, market participants keep the cautious note so far this week amidst alternating risk appetite trends in a context dominated by renewed jitters following fresh COVID-19 cases in several countries.
Later in the session, the stimulus package for those European countries hit the hardest by the coronavirus pandemic will be on top of the agenda at the EU Leaders Summit. Earlier on Friday, German Producer Prices contracted at a monthly 0.4% and 2.2% over the last twelve months. In the broader Euroland, the Current Account surplus shrunk to €10.2 billion during April (from €40.7 billion).
Across the pond, there are no data releases of note, whereas Fed’s Powell will participate in a virtual discussion at the Cleveland Fed, seconded by speeches by FOMC’s R.Quarles, E.Rosengren and L.Mester.
What to look for around EUR
EUR/USD maintains the choppy fashion so far this week, with gains clearly limited around the 1.1350 region while support emerged near 1.1180. In the meantime, price action continues to look to the gradual return to some sort of normality in economies of Europe as well as rising concerns over the probability of a second wave of coronavirus contagion. The constructive view in the euro, however, remains well sustained by the gradual and relentless re-opening of economies in Europe and by the ongoing monetary stimulus announced by the ECB, Germany and the European Commission. On top, the solid performance of the region’s current account is also adding to the attractiveness of the shared currency.
EUR/USD levels to watch
At the moment, the pair is gaining 0.01% at 1.1206 and a break above 1.1422 (weekly/monthly high Jun.10) would target 1.1448 (50% Fibo of the 2017-2018 rally) en route to 1.1495 (2020 high Mar.9). On the other and, immediate contention emerges at 1.1185 (weekly low Jun.18) seconded by 1.1147 (high Mar.27) and finally 1.1026 (200-day SMA).
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