- EUR/USD comes under pressure and tests 1.1060.
- The 1.1080/90 band remains a key barrier.
- German Producer Prices surprised to the downside.
The single currency is now under renewed downside pressure and drags EUR/USD to fresh 2-day lows in the 1.1060 region.
EUR/USD weaker on trade concerns, looks to FOMC
The pair is interrupting a 4-day positive streak on Wednesday in response to the pick-up in the demand for the greenback, increasing risk off sentiment and the broad-based decline in bond yields both in the US and in the Old Continent.
In the meantime, another failed attempt to break above the 1.1080/90 band has motivated sellers to return to the markets and collaborate with the ongoing knee-jerk.
In the docket, German Producer Prices missed consensus earlier in the day after contracting at a monthly 0.2% during October and 0.6% from a year earlier. Later in the day, the FOMC are expected to grab all the attention.
What to look for around EUR
Spot met strong resistance in the 1.1080/90 band for the time being while it keeps looking to USD-dynamics and headlines from the US-China trade front for direction. On the macro view, the outlook in Euroland remains fragile and does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the medium term at least. In this regard, all the looks will be upon the release of November’s preliminary PMIs later in the week.
EUR/USD levels to watch
At the moment, the pair is losing 0.17% at 1.1059 and a breach of 1.0989 (monthly low Nov.14) would target 1.0925 (low Sep.3) en route to 1.0879 (2019 low Oct.1). On the upside, the initial barrier emerges at 1.1089 (high Nov.18) followed by 1.1174 (200-day SMA) and finally 1.1179 (monthly high Oct.21).
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