- EUR/USD loses the grip and recedes to the 1.1250/40 band.
- The dollar trims losses and is now flat for the day.
- EMU Industrial Production coming up next on the docket.
After climbing as high as the 1.1330 region earlier on Thursday, EUR/USD came under pressure and it has now retreated to the area of 1.1250/40 band, or weekly lows.
EUR/USD looks to data, COVID-19 headlines
EUR/USD is now losing ground for the third session in a row on Thursday following a recovery in the greenback despite yields on both sides of the Atlantic remain depressed.
In the meantime, unremitting (and still rising) concerns around the COVID-19 continue to rule the sentiment in the global markets, with investors’ preference for safe havens keep fuelling the demand for JPY, CHF and bonds.
Later in Euroland, Industrial Production figures in the bloc for the month of January are likely to shed more light on the potential rebound in the sector in light of the latest better-than-expected results in Germany. Across the pond, usual weekly Claims are due seconded by Producer Prices.
What to look for around EUR
EUR/USD remains under pressure following Tuesday’s significant pullback, although decent contention appears to have emerged in the mid-1.1200s for the time being. In the meantime, the positive outlook around the euro remains sustained by USD-weakness amidst COVID-19 panic, shrinking US yields and the tangible probability of another interest rate cut by the Fed later in the month. Further up, investors’ attention, has now shifted to the ECB meeting later on Thursday and the probability of an emergency rate cut (10 bps most likely). On the macro view, recent better-than-expected results in both Germany and the broader Euroland appear to have re-ignited some optimism among investors regarding the possibility of some recovery in the region and the currency. This view is also supported by latest news of fiscal stimulus in Germany.
EUR/USD levels to watch
At the moment, the pair is losing 0.22% at 1.1245 and faces the next support at 1.1222 (10-day SMA) followed by 1.1239 (monthly high Dec.31 2019) and finally 1.1186 (61.8% Fibo of the 2017-2018 rally). On the flip side, a break above 1.1495 (2020 high Mar.9) would target 1.1514 (high Jan.31 2019) en route to 1.1569 (2019 high Jan.10).
Share
