- Spot sees some correction lower from earlier tops near 1.1490.
- The greenback bounces off lows in the vicinity of 96.00.
- Advanced PMIs next of relevance in Euroland ahead of ECB.
The ongoing rebound in the demand for the greenback is forcing EUR/USD to shed initial gains and return to the negative territory in the 1.1375.70 band.
EUR/USD looks to data, ECB
The pair is attempting a recovery after bottoming out in the 1.1330 region earlier in the week, always against the backdrop of thin volatility, alternating risk appetite trends and the predominance of Brexit headlines and the US-China trade dispute as drivers of the global sentiment.
Ahead in the session, preliminary PMIs will grab all the attention in Euroland amidst the ongoing deceleration of fundamentals in the bloc. Later in the day, the European Central Bank is expected to leave key rates and forward guidance unchanged, while Draghi’s presser is seen leaning towards the dovish side.
What to look for around EUR/USD
The shared currency is expected to keep the sideline theme intact ahead of the ECB meeting due later. Investors’ attention should then orbit around the opinion of the Governing Council on the current slowdown in the region and its (renewed?) views on the risks now facing the euro area. On the broader picture, market participants would start looking at the EU parliamentary elections in May along with the social scenario in France as well as Italian politics.
EUR/USD levels to watch
At the moment, the pair is down 0.08% at 1.1372 facing the next support at 1.1336 (low Jan.22) followed by 1.1323 (200-week SMA) and finally 1.1306 (2019 low Jan.3). On the flip side, a break above 1.1396 (10-day SMA) would target 1.1415 (21-day SMA) en route to 1.1442 (38.2% Fibo of the September-November drop).