- EUR/USD tumbles to lows in sub-1.1100 levels.
- The Greenback gains traction and climbs to highs.
- US ISM Non-Manufacturing next of relevance today.
The selling momentum around the single currency is now picking up extra pace and dragging EUR/USD to fresh weekly lows in the vicinity of 1.1090.
EUR/USD now looks to data
The pair accelerates the downside to fresh 4-day lows in the area below the key support at 1.1100 the figure on Tuesday, always on the back of the solid momentum in the Greenback. Indeed, tracked by the US Dollar Index (DXY), the buck is testing weekly highs beyond 97.70.
In the meantime, the risk-on trade continues to dominate the global sentiment after news on the US-China trade front noted the likeliness that some US tariffs on Chinese imports could be removed. The news fuelled the selling pressure in safe havens and keeps pushing US yields higher.
In the docket, the US trade deficit shrunk to $52.5 billion during September, the lowest level in the last three years. Later in the NA session, Markit will publish its final Services PMI for the month of October ahead of JOLTs Job Openings and the key ISM Non-Manufacturing.
What to look for around EUR
The pair has come under some selling pressure as of late on the back of the renewed buying interest in the buck. In the meantime, a breakout of October’s high near 1.1180 remains elusive and this could be a source of potential consolidation in the near term and the later resumption of the downtrend. Despite last month’s up move in spot has been exclusively sponsored by weakness in the Dollar, the outlook in Euroland remains fragile and does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the medium term at least. In addition, the possibility that the German economy could slip into recession in Q3 remains a palpable risk for the outlook and is expected to weigh on EUR in the short/medium term horizon.
EUR/USD levels to watch
At the moment, the pair is losing 0.26% at 1.1098 and a breakdown of 1.1072 (low Oct.25) would target 1.1045 (55-day SMA) en route to 1.0925 (low Sep.3). On the flip side, the next up barrier emerges at 1.1179 (monthly high Oct.21) seconded by 1.1186 (61.8% Fibo of the 2017-2018 rally) and finally 1.1193 (200-day SMA).
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