Search ForexCrunch
  • EUR/USD starts the week on a better mood.
  • German Retail Sales expanded 0.5% MoM in August.
  • Draghi noted that stimulus might last a long time.

The single currency has started the week on a positive footing and is lifting EUR/USD to the 1.0940 region, or daily highs.

EUR/USD looks to German docket, trade

Spot is adding to Friday’s gains and is extending the rebound from fresh 2019 lows in levels just above 1.09 the figure, always on the back of the ongoing correction lower in the Greenback.

Trade jitters appear to have returned to the fore today following news that the White House could delist some Chinese companies from US markets and limit US investments in China.

Earlier in the day, President M.Draghi stressed that most of the risks facing the euro area come from outside the region, while added that the monetary stimulus could stay for a long time.

In the docket, German Retail Sales expanded at a monthly 0.5% during august and 3.2% from a year earlier. Later, the German labour market figures are due seconded by advanced inflation data for the current month.

What to look for around EUR

EUR dropped to new 2-year lows vs. the Greenback in levels just above 1.09 the figure last week, as investors’ sentiment remains sour and without any hint of getting any better, at least in the near/medium term. In fact, the slowdown in the euro area stays far from abated and carries the potential to deteriorate further, as per the latest PMIs in core Euroland and despite the lacklustre improvement in a couple of German sentiment gauges. Speaking of Germany, the likeliness that the country could slip back into recession in the third quarter just adds to the already gloomy panorama for the bloc and weighs further on the single currency. The unremitting slowdown in the region does nothing but justify the ‘looser for longer’ monetary stance by the ECB. On another front, potential US tariffs on imports of EU cars remain well on the table, while the Brexit limbo and UK politics adds to the ongoing concerns.

EUR/USD levels to watch

At the moment, the pair is gaining 0.03% at 1.0943 and faces the next resistance at 1.1009 (21-day SMA) followed by 1.1109 (monthly high Sep.13) and finally 1.1163 (high Aug.26). On the flip side, a breach of 1.0904 (2019 low Sep.3) would target 1.0839 (monthly low May 11 2017) en route to 1.0569 (monthly low Apr.10 2017).