- The pair keeps its daily gains near 1.1380.
- USD weakness keeps sustaining the up move.
- US Chief Powell’s testimony coming up next.
The softer tone in the greenback is allowing the continuation of the upside momentum in EUR/USD to the 1.1370/80 band, or new 3-week peaks.
EUR/USD now looks to Powell
The better mood in the risk-associated complex plus lower-than-expected results from the US calendar have added further downside pressure to the buck and bolstered the up move in the pair to fresh multi-week highs.
The selling bias in the buck has been exacerbated today after US Housing Starts contracted more than initially estimated in December, while house prices gauged by the S&P-Case Shiller index also missed consensus rising 4.2% on a year to December. On the bright side, Building Permits surprised to the upside during the same period.
Looking ahead, consensus among investors leans towards a dovish tone at Powell’s testimony before the Senate Banking Panel due later.
What to look for around EUR
The European currency continues to look to developments from the US-China trade talks for near term direction, while the effervescence on the US-EU trade front appear somewhat relegated so far. Recent poor prints from the euro docket and a ‘reality check’ from the ECB minutes appear to have exacerbated concerns over the deterioration in the bloc’s fundamentals and casted further shadows over the probability of any action on rates from the ECB later this year.
EUR/USD levels to watch
At the moment, the pair is gaining 0.10% at 1.1368 facing the next up barrier at 1.1375 (high Feb.26) seconded by 1.1381 (55-day SMA) and then 1.1391 (100-day SMA). On the other hand, a break below 1.1320 (10-day SMA) would target 1.1275 (low Feb.19) en route to 1.1234 (2019 low Feb.15).