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  • The pair faces rising selling pressure and approaches the 1.1300 handle.
  • The greenback picks up pace on US-China rumours.
  • Attention remains on the upcoming Brexit vote on Article 50.

The selling pressure around the shared currency is now picking up further pace and motivates EUR/USD to recede from recent tops and refocus on the 1.1300 area.

EUR/USD focused on risk trends, Brexit

Following four consecutive daily gains, spot is now showing some lack of confidence to extend the rally beyond the 1.1340 area for the time being, receding to daily lows in the vicinity of the 1.1300 handle.

Sellers have suddenly clustered around the shared currency in response to market chatter pointing to the postponement of the Trump-Xi meeting for the month of April. It is worth recalling that both parties have originally agreed to meet later this month to discuss what market were already calling the latest stage prior to a trade deal.

In the data space, German final CPI figures came in below the preliminary readings for the month of February, showing consumer prices rose 0.4% inter-month and 1.5% from a year earlier. On the opposite side, French prices improved from the flash prints.

In the US docket, the usual weekly report on the labour market is due along with New Home Sales, the NAHB index and Export/Import Prices.

In addition, and what will be the salient event today, the UK House of Commons will likely pass the vote for an extension of the Article 50 for an extra 2-3 months.

What to look for around EUR

Market participants appear to have already adjusted to the recent and renewed dovish stance from the ECB, focusing instead on the broad risk-appetite trends as the main driver of the price action in the near term. In the longer run, the performance of the economy in the region should remain in centre stage along with prospects of re-assessment of the ECB’s monetary policy. In this regard, it is worth mentioning that investors keep pricing in the first rate hike by the central bank at some point in H2 2019. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections, where the focus of attention will be on the potential increase of the populist option among voters.

EUR/USD levels to watch

At the moment, the pair is losing 0.13% at 1.1310 and a break below 1.1291 (10-day SMA) would target 1.1176 (2019 low Mar.7) en route to 1.1118 (monthly low Jun.20 2017). On the flip side, the next hurdle lines up at 1.1338 (high Mar.13) seconded by 1.1369 (55-day SMA) and finally 1.1419 (high Feb.14).