- EUR/USD moves lower and meets support at 1.0940.
- Services PMIs in Euroland, EMU’s PPI, Retail Sales next on tap.
- US ISM Non-manufacturing, Durable Goods Orders of note later.
EUR/USD appears to have met a strong resistance in the mid-1.0900s for the time being amidst a recovery attempt in the Greenback.
EUR/USD attention to data
The pair is exchanging gains with losses around the 1.0940/50 region in the European morning, looking to extend the positive streak for yet another session after YTD lows near 1.0880 on Tuesday.
Broad-based fears of a recession in the US economy in the next couple of years continue to fuel the selling pressure around the Dollar and the downtrend in US yields, all collaborating further with the corrective upside in spot.
Later in the session, final services PMIs for the month of September are due in the euro area seconded by Retail Sales and Producer Prices in Euroland. Across the pond, the ISM Non-manufacturing PMI will be the main release followed by Durable Goods Orders, Factory Orders, Services PMI, Initial Claims and Challenger Job Cuts.
What to look for around EUR
The pair keeps the weekly recovery well and sound so far today, retaking levels well above the 1.09 barrier on the back of increasing selling pressure hitting the Greenback. The up move in the pair, however, is seen as corrective only, as the slowdown in the region stays far from abated and carries the potential to deteriorate further, as per the latest PMIs in core Euroland and despite the lacklustre improvement in a couple of German sentiment gauges. Speaking of Germany, the likeliness that the country could slip back into recession in the third quarter just adds to the already gloomy panorama for the bloc and weighs further on the single currency. The unremitting slowdown in the region does nothing but justify the ‘looser for longer’ monetary stance by the ECB. On another front, potential US tariffs on imports of EU cars remain well on the table, while the Brexit limbo and UK politics adds to the ongoing concerns.
EUR/USD levels to watch
At the moment, the pair is retreating 0.09% at 1.0948 and a breach of 1.0879 (2019 low Oct.1) would target 1.0839 (monthly low May 11 2017) en route to 1.0569 (monthly low Apr.10 2017). On the upside, the next hurdle aligns at 1.1000 (21-day SMA) followed by 1.1109 (monthly high Sep.13) and finally 1.1163 (high Aug.26).
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