- EUR/USD reverses Friday’s drop and tests 1.1030.
- DXY trades slightly offered on Monday.
- German IFO next of relevance later in the morning.
The single currency has started the week on a better mood and is now helping EUR/USD to regain some poise and test the 1.1030 region.
EUR/USD now looks to German data
After three consecutive daily pullbacks, the pair is now managing to regain some buying interest and is moving closer to the key 55-day SMA in the 1.1040 region amidst some renewed offered tone in the buck and lack of fresh headlines from the US-China trade front.
In the docket, investors will be closely following the release of the German IFO for the current month in search of some improvement (if any at all) in the German morale. Later in the week, November’s advanced inflation figures in Germany and the broader Euroland should keep the EUR in centre stage. Across the pond, the Chicago Fed index is only expected later in the NA session.
What to look for around EUR
Spot has been rejected from the vicinity of the 1.1100 barrier once again last week, sparking the subsequent knee-jerk to the vicinity of the critical support at 1.10 the figure. As always, EUR is expected to keep tracking trade headlines and USD-dynamics for the time being. On the more macro view, the outlook in Euroland remains fragile and does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the cautious view on the European currency in the medium term. In this regard, latest estimates from manufacturing PMIs in the euro region hint at the likeliness that the sector appear to have bottomed out, although the contagion to the services sector looks more evident as it gained extra pace.
EUR/USD levels to watch
At the moment, the pair is gaining 0.12% at 1.1031 and faces the next hurdle at 1.1083 (100-day SMA) followed by 1.1097 (monthly high Nov.21) and finally 1.1171 (200-day SMA). On the downside, a break below 1.0989 (monthly low Nov.14) would target 1.0925 (low Sep.3) en route to 1.0879 (2019 low Oct.1).
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