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  • Spot keeps the bearish note unchanged so far on Monday.
  • US-China trade negotiations remains in centre stage.
  • EMU Sentix index rebounds to -2.2 in March.

The selling bias around the European currency remains well and sound at the beginning of the week and is now forcing EUR/USD to the area of multi-day lows near 1.1330.

EUR/USD flirting with the 200-week SMA

The pair has quickly faded the initial optimism despite the better mood surrounding the risk-complex, coming under renewed selling pressure and falling to the key support area near the 200-week SMA around 1.1330.

EUR remained apathetic in spite of the small improvement in the Sentix index for the current month, rebounding to -2.2 from February’s -3.7. Further releases in the EMU docket saw Producer Prices rising at an annualized 3.0% and 0.4% inter-month in January.

Looking ahead, Italian Q4 GDP figures are expected tomorrow along with Services PMIs in the euro bloc, while the ISM Non-manufacturing will be the salient event in the NA session.

What to look for around EUR

In line with the broader risk-associated complex, the shared currency continues to look to developments from the US-China trade negotiations for near term direction. Looking at the broader picture, the ECB is expected to remain in ‘pause mode’ for the foreseeable future amidst the ongoing slowdown in the region, while investors have practically priced out any up move in rates this year. In addition, political headwinds are seen arising in light of the upcoming EU parliamentary elections, where the focus of attention could be on the probable increased presence of populism.

EUR/USD levels to watch

At the moment, the pair is losing 0.20% at 1.1340 and faces the next support at 1.1334 (low Mar.4) seconded by 1.1289 (low Jan.24) and finally 1.1234 (2019 low Feb.15). On the upside, a breakout of 1.1419 (high Feb.28) would target 1.1442 (38.2% Fibo of the September-November drop) en route to 1.1506 (200-day SMA).