- The pair moves higher and clinches tops near 1.1390.
- The greenback retreats to the 96.30/25 band, session lows.
- Brexit remains in centre stage today.
EUR/USD is recovering the smile at the beginning of the week and is now looking to extend the up move to the vicinity of the 1.1400 handle, clinching at the same time fresh daily highs.
EUR/USD looks to Brexit
After four consecutive daily pullbacks, the pair has started the week on a positive note amidst a selling bias surrounding the greenback, which continues to shed ground following last week’s positive performance by the US Dollar Index.
With US markets closed due to the Martin Luther King holiday, investors’ attention will be exclusively on Brexit developments, as PM Theresa May should present later today an alternative Brexit plan.
Data wise in Euroland, German Producer Prices contracted at a monthly 0.4% and 2.7% YoY in December, both prints coming in below expectations.
What to look for around EUR/USD
Last week’s decline in the pair has been on the back of renewed demand for the greenback and the dovish tilt from Draghi’s speech before the European Parliament. Furthermore, focus in the euro bloc should remain on the ongoing slowdown in the region, EU Parliamentary elections in May (populism could gain further presence), social unease in France (the ‘yellow-vest’ issue remains largely unresolved), omnipresence political effervescence in Italy and the likeliness that a technical recession in Germany in H2 2018.
EUR/USD levels to watch
At the moment, the pair is gaining 0.19% at 1.1383 and a breakout of 1.1421 (21-day SMA) would target 1.1442 (38.2% Fibo of the September-November drop) and finally 1.1461 (100-day SMA). On the flip side, the next support emerges at 1.1353 (low Jan.18) seconded by 1.1306 (2019 low Jan.3) and finally 1.1269 (monthly low Dec.14 2018).
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