- EUR/USD regains composure and bounces off recent lows.
- No change in the German Unemployment Rate in March.
- Investors’ attention is expected to gyrate around Biden’s speech.
The single currency smiles again and pushes EUR/USD back to the 1.1740 area on Wednesday.
EUR/USD looks to Biden, data
EUR/USD manages to reverse two consecutive daily pullbacks and rebounds from earlier new 2021 lows in levels just above 1.17 the figure.
The renewed selling bias around the greenback allows the pair to reclaim some ground lost in past sessions and retake the 1.1740 area, as market participants adjust to the usual month/quarter-end flows.
In the euro docket, the German Unemployment Rate stayed put at 6.0% in February while the Unemployment Change went down by 8K in the same period. Later in the session, inflation figures in the broader Euroland are also due.
Across the pond, all the attention is expected to be on the Biden’s speech and his plans of another stimulus package including around $3 trillion investment in infrastructure, manufacturing and health care.
In the data sphere, the March’s ADP report is due seconded by the Chicago PMI, Pending Home Sales and the EIA’s report.
What to look for around EUR
EUR/USD meets some decent support in the 1.1700 neighbourhood so far this week. The strong pullback in the pair came along the persistent bid bias of the greenback, which has been undermining the constructive view in the pair in the past weeks. The deterioration of the morale in Euroland coupled with the poor pace of the vaccine rollout in the region and the outperformance of the US economy (vs. its G10 peers) have all been collaborating with the renewed offered stance around the single currency. However, the steady hand from the ECB (despite some verbal concerns) in combination with the expected rebound of the economic activity in the region in the post-pandemic stage is likely to prevent a much deeper pullback in the pair in the longer run.
Key events in the euro area this week: EMU’s flash CPI (Wednesday) – German Retail Sales, final PMIs in the euro area (Thursday).
Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the vaccine rollout. Probable political effervescence around the EU Recovery Fund.
EUR/USD levels to watch
At the moment, the index is gaining 0.22% at 1.1740 and a breakout of 1.1864 (200-day SMA) would target 1.1989 (weekly high Mar.11) en route to 1.2000 (psychological level). On the flip side, the next support emerges at 1.1704 (2021 low Mar.31) seconded by 1.1602 (monthly low Nov.4) and finally 1.1572 (2008-2021 support line).