EUR/USD hovering around the 1.1100 handle post-German data

• EUR/USD trades unchanged around 1.1100 on Tuesday.
• Markets’ attention remains on US-China trade war.
• German final Q2 GDP came in at -0.1 QoQ and 0.0% YoY.

The cautious tone appears to prevail around the shared currency early in the European morning, with EUR/USD orbiting without direction around the 1.1100 area.

EUR/USD focused on trade, Italy

The pair is trading in the lower bound of the weekly range in the wake of Monday’s sell off to sub-1.1100 levels.

The moderate rebound in the demand for the Greenback after some optimism emerged on the US-China trade front forced the pair to fade a big part of Friday’s strong rebound. Decent support, however, emerged in the 1.1100 neighbourhood for the time being.

News from the trade front eclipsed some positive headlines from the Italian political arena, where a new coalition government between the M5S and the PD looks closer as negotiations remain under way.

In the docket, German final Q2 GDP figures noted the economy contracted 0.1% inter-quarter and came in flat on a yearly basis, both prints disappointing expectations.

Data across the pond will show the Consumer Confidence gauge along with the S&P/Case-Shiller index.

What to look for around EUR

The pair charted a bullish ‘outside day’ last Friday and today’s price action should be key in assessing the potential for further recovery in the next days. In the meantime, US-China trade jitters continue to drive the sentiment in the global markets, while expectations of ECB easing and Italian politics warns against the sustainability of occasional bullish attempts, all amidst the unremitting deterioration of the economic outlook in the region.

EUR/USD levels to watch

At the moment, the pair is gaining 0.01% at 1.1101 and a break above 1.1163 (high Aug.26) would target 1.1186 (61.8% Fibo of the 2017-2018 up move) en route to 1.1207 (55-day SMA). On the other hand, immediate contention is located at 1.1094 (low Aug.26) followed by 1.1051 (low Aug.23) and finally 1.1026 (2019 low Aug.1).