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  • EUR/USD now recedes from previous tops near 1.0910.
  • Stronger Dollar keep the pair under pressure.
  • US ISM manufacturing coming up next.

EUR/USD is now alternating gains with losses in the vicinity of 1.0900 the figure, always against the backdrop of the unabated rally in the Greenback

EUR/USD now focused on US data

Despite the pair has managed well to rebound from 2-year lows in the 1.0880/75 band, the area just above the 1.0900 mark continues to cap occasional bullish attempts for the time being.

Higher German yields have been collaborating with the better tone in EUR in past hours, motivating the spread differential vs. their American peers to reduce.

Later in the session, the critical US ISM manufacturing will be the salient event. Earlier in Euroland, preliminary inflation figures for the broader euro bloc showed consumer prices are expected to rise 0.9% on a year to September. Core prices are seen gaining 1.0% YoY, matching consensus.

Today’s CPI results gave further evidence of the absence of upside traction in inflation in the region, lending at the same time extra support to the recent stimulus measures announced by the ECB.

What to look for around EUR

EUR dropped to new 2-year lows vs. the Greenback in the 1.0880/75 band earlier in the session, as investors’ sentiment remains sour and without any hint of getting any better, at least in the near/medium term. In fact, the slowdown in the euro area stays far from abated and carries the potential to deteriorate further, as per the latest PMIs in core Euroland and despite the lacklustre improvement in a couple of German sentiment gauges. Speaking of Germany, the likeliness that the country could slip back into recession in the third quarter just adds to the already gloomy panorama for the bloc and weighs further on the single currency. The unremitting slowdown in the region does nothing but justify the ‘looser for longer’ monetary stance by the ECB. On another front, potential US tariffs on imports of EU cars remain well on the table, while the Brexit limbo and UK politics adds to the ongoing concerns.

EUR/USD levels to watch

At the moment, the pair is gaining 0.04% at 1.0901 and faces the next hurdle at 1.0925 (low Sep.3) seconded by 1.1003 (21-day SMA) and finally 1.1109 (monthly high Sep.13). On the flip side, a breakdown of 1.0879 (2019 low Oct.1) would target 1.0839 (monthly low May 11 2017) en route to 1.0569 (monthly low Apr.10 2017).