- Recent recovery fails to defeat bears supported by the greenback’s safe-haven demand.
- 1.1175/70 area continues to become strong support-zone to watch
The EUR/USD pair seesaws around 1.1200 mark at the start of Asian trading on Wednesday. The quotes remain near to month’s low despite recent pullback as global investors hold their love for the US Dollar (USD) amid macro growth and political uncertainty. A few more readings of purchasing managers’ index (PMI) are on the economic table to follow.
Markets’ failure to keep lauding riskier assets amid renewed economic challenges conveyed by soft data joined hands with the political uncertainty surrounding the Brexit. With this, traders rushed to safe-havens like the greenback in order to rest assured of less harm to their investments.
Off-late the EUR/USD pair witnessed pullback as news reports from the UK showed PM May’s readiness for cross-party talks to break the Brexit deadlock ahead of April 12 deadline. The same was aptly praised by the EU lawmakers and receded some pressure off the table for hard Brexit.
However, there hasn’t been a marked improvement in the EU sentiment that signaled sustained support for loose monetary policy amid sluggish data. The latest among them is Eurozone PPI that remained weaker than expected on a YoY basis while following a soft consensus on a monthly form. As a result, traders may keep observing data flow for fresh impulse.
The US 10-year treasury yields remain on a back-foot at 2.472% by loosing 2.5 basis points from 2.5% high marked earlier in the week.
Looking forward, the final reading of the Eurozone composite PMI and the retail sales will be up from the EU whereas final services PMI and ISM non-manufacturing PMI are on cards from the US side.
The Eurozone Markit composite PMI is likely to confirm initial reading of 51.3 while retail sales growth could increase to +2.3% from +2.2% on a yearly basis. On the other hand, the US Markit services PMI could also assent 54.8 flash estimations but the ISM non-manufacturing PMI could soften to 58.0 from 59.7 prior.
EUR/USD Technical Analysis
EUR/USD needs to slip under 1.1175-70 support-zone comprising March lows and a descending trend-line stretched since November 2018 in order extend downside towards June 2017 low near 1.1120 and 1.1110 comprising May 2017 bottom. Should prices keep trading southwards past-1.1110, another downward sloping trend-line stretched since August 2018, at 1.1080 now, could gain bears’ attention.
Meanwhile, pair’s pullback from the current levels can avail 1.1250 as an immediate resistance ahead of challenging 1.1300 and 50-day simple moving average (SMA) level of 1.1330.
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