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  • The pair struggles for direction near 1.1340.
  • The greenback stays sidelined around 96.50.
  • German trade surplus widened to €19.4 billion in December.

The recent decline in the single currency is showing some signs of respite today and is helping EUR/USD to keep the trade in the 1.1340 region.

EUR/USD looks to risk trends

After yesterday’s test of fresh lows in the 1.1320 region, spot managed to regain some traction to the current 1.1340 area, although it still remains under pressure amidst alternating risk appetite trends in the global markets.

EUR has practically paid no attention to today’s German data, where December’s trade surplus improved to €19.4 billion, surpassing previous estimates as well.

Adding to the downbeat sentiment around the shared currency, the European Commission has publish its winter forecasts yesterday, where it revised lower its prospects of economic growth for 2019 in both Germany (1.1% from 1.8%) and the broader euro bloc (1.3% from 1.9%). In addition, inflation in the region is now seen at 1.4% during this year (from 1.8%).

What to look for around EUR/USD

The extent and duration of the slowdown in Euroland continues to be in centre stage following recent figures from Q4 GDP in the region, the persistent negative streak from German fundamentals and the recently published EC forecasts for growth and inflation. On the political scenario, May’s EU parliamentary elections should start to gather relevance with the days, paying special attention to the potential advance of populism in the region.

EUR/USD levels to watch

At the moment, the pair is losing 0.03% at 1.1337 and a break below 1.1324 (low Feb.7) would aim for 1.1289 (2019 low Jan.24) en route to 1.1269 (monthly low Dec.14 2018). On the other hand, the next hurdle emerges at 1.1389 (55-day SMA) seconded by 1.1429 (100-day SMA) and finally 1.1442 (38.2% Fibo of the September-November drop).