- The pair rebounds from lows and advances to 1.1255/60.
- The greenback slips back to the 96.80 region following recent highs.
- German flash CPI, US final Q4 GDP next of relevance in the docket.
Following two consecutive sessions with losses, EUR/USD has now managed to regain some composure and is heading back towards the 1.1260 region, clinching at the same time session tops.
EUR/USD looks to data, risk trends
Spot appears to have met some dip-buying feeling in recent lows in the 1.1240/30 band, coincident with February lows. However, the single currency is expected to remain under pressure in line with the prevailing risk-off sentiment in the global markets.
In fact, the mood surrounding the riskier assets soured in past sessions in tandem with rising fears of a global slowdown and declining yields of bonds in the G10 space, which rendered in wider spreads vs. their American peers.
Interesting day ahead when comes to data releases, as German preliminary inflation figures for the current month will be the salient event in Euroland seconded by ECB’s M3 Money Supply, Private Sector Loans and several gauges of sentiment and confidence in the euro bloc.
Across the pond, the final print of Q4 GDP will take centre stage along with Initial Claims, Pending Home Sales and Fedspeak.
What to look for around EUR
Market participants have left behind the recent and renewed dovish stance from the ECB, focusing instead on the broad risk-appetite trends, USD-dynamics and domestic data. Regarding the latter, and looking to the broader picture, the view of a slowdown in the bloc has been ‘confirmed’ in past days following disappointing advanced PMIs in core Euroland. This, in turn, should add to the idea of a ‘patient for longer’ stance from the ECB. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections, where the focus of attention will be on the potential increase of the populist option among voters.
EUR/USD levels to watch
At the moment, the pair is gaining 0.14% at 1.1259 and a break above 1.1307 (21-day SMA) would target 1.1359 (100-day SMA) en route to 1.1448 (high Mar.20). On the other hand, immediate support emerges at 1.1242 (low Mar.27) seconded by 1.1234 (low Feb.15) and finally 1.1215 (2018 low Nov.12).
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