- The pair fails near 1.1340, waking up sellers.
- The greenback extends the rebound from recent lows.
- French, German final CPI next on tap ahead of Brexit vote.
After climbing to fresh tops in the vicinity of 1.1340, EUR/USD has now come under some selling pressure and recedes to the 1.1310 area ahead of the opening bell in Euroland.
EUR/USD looks to data, Brexit
Positive risk appetite trends have helped spot to rebound from last week’s YTD lows in the 1.1180 region to yesterday’s fresh tops in the boundaries of 1.1340, all on the back of renewed weakness hitting the buck since the start of the week.
In addition, the positive momentum around the British Pound on Brexit developments was also sustaining the upbeat sentiment in the risk-associated complex.
In the data sphere, French and German final CPI figures for the month of February are coming up next ahead of New Home Sales, Initial Claims and Export/Import Prices due across the pond during the NA session.
In addition, another Brexit vote, this time on the extension of Article 50, is expected to pass at the House of Commons this evening, opening the door for a continuation of the negotiations for at least a couple of extra months.
What to look for around EUR
Market participants appear to have already adjusted to the recent and renewed dovish stance from the ECB, focusing instead on the broad risk-appetite trends as the main driver of the price action in the near term. In the longer run, the performance of the economy in the region should remain in centre stage along with prospects of re-assessment of the ECB’s monetary policy. In this regard, it is worth mentioning that investors keep pricing in the first rate hike by the central bank at some point in H2 2019. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections, where the focus of attention will be on the potential increase of the populist option among voters.
EUR/USD levels to watch
At the moment, the pair is losing 0.07% at 1.1317 and a break below 1.1291 (10-day SMA) would target 1.1176 (2019 low Mar.7) en route to 1.1118 (monthly low Jun.20 2017). On the flip side, the next hurdle lines up at 1.1338 (high Mar.13) seconded by 1.1369 (55-day SMA) and finally 1.1419 (high Feb.14).
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