EUR/USD attempts recovery from YTD lows of 1.0905, will it last?
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EUR/USD attempts recovery from YTD lows of 1.0905, will it last?

  • EUR/USD renews two-year lows, but manages to hold 1.0900.
  • The spot remains vulnerable amid weak Eurozone data, recent broad USD strength.
  • Attention turns to Eurozone Confidence numbers and US data for fresh directives.  

The US dollar bulls take a breather heading into the European open, allowing a tepid bounce in EUR/USD from fresh over two-year lows of 1.0905. However, the risks remain skewed to the downside ahead of the key US macro data.

EUR/USD: Bears target May 2017 lows at 1.0840

The spot ran into fresh supply in early Asia following a brief consolidative mode overnight and hit the lowest levels since May 2017 after the US dollar reached fresh three-week tops against its main competitors. The buying interest in the greenback intensified amid increased safe-haven demand, as US political worries continued to dampen the investor sentiment.

Moreover, the recent dollar strength can be also attributed to the oversubscription of both the overnight and term repo that accelerated the dollar funding shorted and boosted the demand for the US currency across the board. The latest dip in the main currency pair was quickly bought into just ahead of the 1.09 handle, as the US dollar reversed from multi-week tops of 99.27, with USD index now flat at 99.15.

However, the EUR/USD recovery appears shallow amid macro and monetary policy divergence between both continents. Poor Eurozone economic fundamentals continue to weigh on the shared currency while the US economy remains resilient, despite the trade worries. Also, the European Central Bank (ECB) explicitly remained titled towards a dovish bias while increasingly less-dovish-than-expected language from Federal Reserve (Fed) officials render USD-supportive

Markets now eagerly await a flurry of Eurozone confidence numbers for fresh trading impetus ahead of the key US Durable Goods and Core PCE inflation data due later in the NA session.

EUR/USD Technical levels to consider


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