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  • EUR/USD remains bid in the 1.1150/60 band.
  • German Retail Sales jumped 3.5% during June.
  • EMU flash CPI, FOMC meeting next of relevance today.

The buying interest around the European currency stays well and sound in the first half of the week and is now lifting EUR/USD to the area of weekly highs near 1.1160.

EUR/USD up on German data, cautious ahead of Fed

Spot is up since Monday, looking to extend the recovery after recording fresh 2019 lows in levels just above of the 1.1100 handle in the wake of the ECB event last Thursday.

Cautiousness among traders and some steady trading around the greenback allowed the pair to regain some ground lost, although the underlying bearish view remains intact amidst firm speculations of ECB easing as early as in September.

EUR is also deriving some extra oxygen from the German docket, where Retail Sales expanded at a monthly 3.5% in June, bettering estimates. Still in Germany, the labour market report is coming up next along with key preliminary inflation and GDP figures in the broader euro area.

Across the pond, the ADP report will gauge the job creation in the private sector during last month ahead of the critical FOMC event and Non-Farm Payrolls (Friday).

What to look for around EUR

The single currency is expected to remain under scrutiny in the next weeks amidst ECB’s preparations for a fresh wave of monetary stimulus, including a potential reduction of interest rates, the re-start of the QE programme and a probable tiered deposit rate system. The ECB has already changed its forward guidance and it now expects rates to remain at ‘present or lower levels’ until at least mid-2020. The unremitting deterioration of the economic outlook in the region and the lack of traction in inflation are seen limiting any occasional bullish attempts in EUR for the time being and also give extra sustain to the dovish stance in the ECB.

EUR/USD levels to watch

At the moment, the pair is gaining 0.05% at 1.1160 and a break above 1.1233 (55-day SMA) would target 1.1286 (high Jul.11) en route to 1.1302 (200-day SMA). On the downside, immediate support lines up at 1.1101 (2019 low Jul.25) seconded by 1.1021 (high May 8 2017) and finally 1.0839 (monthly low May 11 2017).