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  • EUR/USD loses the grip and retreats to daily lows.
  • The dollar remains bid and pushes DXY to fresh tops.
  • US Producer Prices come up next in the calendar.

The single currency remains offered so far and now drags EUR/USD to new daily lows in the 1.1870 region.

EUR/USD weaker on USD-buying

EUR/USD fades Thursday’s moderate retracement and is back to the negative side of the trading in response to the renewed sentiment towards the greenback.

In fact, the dollar reclaims part of the ground lost in past sessions following a significant rebound in US yields, with the 10-year note approaching the 1.70% mark after bottoming out near 1.60% on Thursday.

In the docket, Industrial Production figures in Germany, France and Spain all came in short of expectations and showing signs of weakness during February. On the ECB side, Vice-President De Guindos said earlier in the session that the economy performed poorly in Q1 and warned against a premature withdrawal of the current stimulus programme.

In the US data sphere, headline Producer Prices rose 1.0% MoM in March and 3.1% over the last twelve months. Core prices advanced 0.7% inter-month and 4.2% vs. March 2020.

What to look for around EUR

EUR/USD managed to finally surpass the 1.19 mark and clinch new 2-week tops around 1.1930, although the move lost some vigour soon afterwards. The near-term outlook, however, looks improved and would not be surprising to see a sustainable advance further north of 1.1900 in the next sessions. The recovery in the pair emerged pari passu with fresh downbeat sentiment in the dollar and rising hopes of a sustained recovery in the Old Continent now that the vaccine rollout appears to have gained some pace.

Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the vaccine rollout. Probable political effervescence around the EU Recovery Fund.

EUR/USD levels to watch

At the moment, the index is losing 0.33% at 1.1872 and a breach of 1.1704 (2021 low Mar.31) would target 1.1602 (monthly low Nov.4) en route to 1.1570 (2008-2021 support line). On the other hand, the next hurdle is located at 1.1927 (weekly high Apr.8) followed by 1.1989 (weekly high Mar.11) and finally 1.2000 (psychological level).