- EUR/USD lost momentum just below the 1.09 mark.
- German Retail Sales contracted 5.6% MoM in March.
- EMU Q1 GDP, flash CPI and the ECB meeting next of relevance.
The shared currency is adding to Wednesday’s upbeat momentum and is now lifting EUR/USD back to the area of weekly peaks near 1.09 the figure.
EUR/USD focused on data, ECB
EUR/USD is up for the second day in a row on Thursday, managing well to ignore poor German data releases and ahead of key results in the broader Euroland and the ECB event.
In fact, German Retail Sales contracted 5.6% inter-month during March. Despite the drop, the contraction was less than initially estimated. Still in Germany, the Unemployment Rate ticked higher by 373K and the jobless rate rose to 5.8% in April (from 5.0%).
In the meantime, the softer tone in the buck continues to sustain the recovery in the pair, always with the interim target in the 1.0900 neighbourhood and with the attention on the timing and shape of the re-opening of some economies in the bloc.
Later in the session, advanced inflation figures and Q1 GDP results are due in the euro area ahead of the ECB gathering, where markets’ consensus sees the central bank keeping rates and monetary policy unchanged.
In the US calendar, weekly Initial Claims will be in the limelight seconded by the PCE and Personal Income/Spending.
What to look for around EUR
The euro extends the recovery from recent lows and is now shifting its focus to the 1.0900 region. As always, developments from the coronavirus and its impact on the economy are expected to keep ruling the sentiment in the global markets for the time being, while optimism on a gradual re-start of the economic activity in some members of the bloc has given extra oxygen to the single currency as of late. On the more macro view, the euro is expected to remain under scrutiny in light of the predicted contraction of the bloc’s economy in the first half of the year, relegating hopes of a potential recovery to Q3 and/or Q4.
EUR/USD levels to watch
At the moment, the pair is gaining 0.02% at 1.0873 and a break above 1.0944 (55-day SMA) would target 1.0990 (weekly/monthly high Apr.15) en route to 1.1034 (200-day SMA). On the flip side, immediate contention is located at 1.0814 (78.6% Fibo of the 2017-2018 rally) seconded by 1.0727 (weekly low Apr.24) and finally 1.0635 (2020 low Mar.23).
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