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  • The pair trades directionless in the 1.1230 region.
  • US-China trade dispute remains the key driver for markets.
  • Germany/EMU ZEW survey on Tuesday next of relevance.

EUR/USD navigates the upper end of the recent range and continues to consolidate above the recently broken 1.1200 barrier.

EUR/USD attention stays on trade talks, data

After three consecutive daily advances, the pair seems to have met some tough resistance near the 1.1260/70 band, where coincide recent peaks and the key 55-day SMA.

EUR, as well as the rest of the risk-associated complex, keeps looking to developments from the US-China trade war, although the recent lack of progress in Washington seems to favour a longer-than-expected negotiation and therefore uncertainty in the markets is unlikely to dissipate for the time being.

Data wise in Euroland, the next publication of note will come in tomorrow with the release of the ZEW survey in both Germany and the broader euro area. Later in the day and across the pond, speeches by FOMC’s Rosengren, Clarida and Kaplan will keep the attention on the buck.

What to look for around EUR

Recent data in Euroland and Germany allowed market participants to believe that some healing process could be under way in the region amidst the ongoing slowdown. However, this scenario needs confirmation in the next months, while the current ‘neutral/dovish’ stance from the ECB is expected to persist for the reminder of the year and probable H1 2020. The broad-based risk-appetite trends and USD-dynamics are posed to rule the sentiment surrounding the European currency for the time being, all in combination with the onoging US-China trade dispute and potential US tariffs on EU products. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections in late May, as the populist option in the form of the far-right and the far-left movements appears to keep swelling among voting countries.

EUR/USD levels to watch

At the moment, the pair is gaining 0.01% at 1.1233 and a break above 1.1264 (high May 1) would target 1.1259 (55-day SMA) en route to 1.1323 (high Apr.17). On the downside, immediate support aligns at 1.1135 (low May 3) seconded by 1.1109 (2019 low Apr.26) and finally 1.0839 (monthly low May 11 2017).