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  • EUR/USD recedes further on Tuesday, gyrates around 1.1250.
  • Risk aversion picks up and weighs on the pair on Tuesday.
  • Another revision of EMU Q1 GDP is next on the docket.

EUR/USD drops to fresh 3-day lows in the 1.1240 region against the backdrop of a pick-up in the demand for the greenback.

EUR/USD offered amidst firm risk aversion

EUR/USD comes under extra downside pressure on Tuesday and drops to fresh multi-day lows in the mid-1.1200s against the backdrop of increasing risk-off sentiment and the improved demand in the dollar.

In the broader scenario and despite the pause in the rally, the pair stays well underpinned by the underlying risk-on sentiment, although the omnipresence of US-China trade concerns remains a permanent threat to this view.

Data wise, another revision of the Q1 GDP in the broader euro area is due along with employment figures. Earlier in the session, the German trade surplus shrunk to €3.2 billion during April, with exports plummeting 24.0% and imports shrinking by 16.5%.

Across the pond, the NFIB index is due followed by Wholesale Inventories, the IBD/TIPP index, JOLTs Job Openings and the API’s weekly report on crude oil inventories.

What to look for around EUR

EUR/USD met strong resistance in the vicinity of 1.1400 at the end of last week. However, the resurgence of the risk-off mood has motivated sellers to step in and drag the pair lower. Despite the knee-jerk, the constructive view in the euro remains well sustained by the gradual and relentless re-opening of economies in Europe and by the ongoing monetary stimulus announced by the ECB, Germany and the European Commission. On top, the solid performance of the region’s current account is also adding to the attractiveness of the shared currency.

EUR/USD levels to watch

At the moment, the pair is retreating 0.37% at 1.1252 and faces the next support at 1.1186 (61.8% Fibo of the 2017-2018 rally) seconded by 1.1016 (200-day SMA) and finally 1.0944 (55-day SMA). On the upside, a breakout of 1.1383 (weekly/monthly high Jun.5) would target 1.1391 (monthly high Jun.13 2019) en route to 1.1412 (monthly high Jun.25 2019).

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