- EUR/USD keeps the side-lined mood in the mid-1.1300s.
- US headline CPI rose 0.1% MoM in February, missing estimates.
- Attention remains on the coronavirus developments so far.
The shared currency keeps the bid tone well and sound on Wednesday, with EUR/USD navigating the mid-1.1300s following the opening bell in Wall Street.
EUR/USD looks firmer ahead of ECB
EUR/USD is so far reversing Tuesday’s sharp pullback and has regained the 1.1300 mark and beyond on Wednesday, although the bullish attempt lost momentum in the 1.1365/70 band for the time being.
The buying interest has returned to the pair on Wednesday as market participants remain sceptical on the potential package of fiscal stimulus expected to be unveiled by the White House, which is holding an emergency meeting later today.
In the docket, the only release of note today was the US inflation figures for the month of February, which showed headline consumer prices rising 0.1% MoM and 2.3% from a year earlier. In addition, prices stripping food and energy costs rose 0.2% inter-month and 2.4% on a yearly basis.
What to look for around EUR
EUR/USD remains in “recovery mode” following Tuesday’s significant pullback to the 1.1280/70 band. In the meantime, the positive outlook around the euro remains sustained by USD-weakness amidst COVID-19 panic, shrinking US yields and the tangible probability of another interest rate cut by the Fed later in the month. Investors’ attention, in the meantime, should shift to the ECB meeting on Thursday. On the macro view, recent better-than-expected results in both Germany and the broader Euroland appear to have re-ignited some optimism among investors regarding the possibility of some recovery in the region and the currency. This view is also supported by latest news of fiscal stimulus in Germany.
EUR/USD levels to watch
At the moment, the pair is gaining 0.41% at 1.1426 and a break above 1.1495 (2020 high Mar.9) would target 1.1514 (high Jan.31 2019) en route to 1.1569 (2019 high Jan.10). On the flip side, immediate contention emerges at 1.1274 (weekly low Mar.10) seconded by 1.1239 (monthly high Dec.31 2019) and finally 1.1186 (61.8% Fibo of the 2017-2018 rally).