- US Dollar Index continues to gather strength in the NA session.
- Construction spending in the U.S. declines in December.
- Today’s data from the euro area fail to help the shared currency.
After closing the previous week with modest gains, the EUR/USD pair spent the first half of the day in a tight range below the 1.14 mark and came under a bearish selling pressure to drop to its lowest level since February 19 at 1.1309. As of writing, the pair is down 0.45% on a daily basis at 1.1320.
Earlier today, Sentix Investor Confidence in the euro zone improved to -2.2 in March from -3.7 in February and the Eurostat reported that the Producer Price Index in February stayed unchanged on a yearly basis in February. Nonetheless, the shared currency failed to take advantage of the upbeat data as investors are refraining from making large euro bets ahead of this week’s critical ECB meeting, at which the bank is expected to slash growth expectations.
Previewing the ECB meeting, “We expect ECB to look through short-term weakness in the data at this stage & note that it remains ready to stimulate economy if needed. While in the near term the growth outlook remains fragile, we do not expect the ECB meeting to change the overall narrative or market sentiment,” argued Danske Bank analysts.
On the other hand, despite some disappointing mid-tier data from the U.S., the greenback extended the recovery move that it started last Wednesday after touching its lowest level in three weeks. The index was last up 0.3% on the day at 96.73.
- USD strength: 3 reasons why the Dollar is King and Trump is only the President.
Technical outlook via FXStreet Chief Analyst Valeria Bednarik
The EUR/USD pair trades around 1.1340, the 38.2% retracement of its latest daily slide between 1.1513 and 1.1233, after failing several times last week to surpass the 61.8% retracement of the same decline at around 1.1410, skewing the risk to the downside. In the 4 hours chart, the pair is barely holding above a directionless 100 SMA while the 20 SMA gains downward strength around 1.1370. Technical indicators in the mentioned chart remain within negative levels, although their bearish strength is limited at the time being, also favoring another leg lower anyway. The main support from here is the 1.1300 figure and seems unlikely the pair can break below it without a proper catalyst. Nevertheless, an approach to it seems likely, which will increase odds of a bearish continuation ahead.
Support levels: 1.1300 1.1265 1.1220
Resistance levels: 1.1375 1.1410 1.1450
Share
