- EUR/USD remains under some heavy selling pressure for the second straight session.
- Slightly hotter-than-expected German CPI figures extended some support to the EUR.
- Investors now look forward to the US ISM PMI and FOMC minutes for a fresh impetus.
The EUR/USD pair dropped to fresh weekly lows, around the 1.1125 region in the last hour, albeit recovered few pips post-German CPI figures.
The pair extended its sharp retracement slide from the vicinity of mid-1.1200s, or five-month tops set on Tuesday and remained under some intense selling pressure for the second consecutive session on the last trading day of the week.
The downfall could be solely attributed to some follow-through long-unwinding trade amid a fresh wave of the global risk-aversion trade, which tends to benefit the US dollar’s perceived safe-haven status against its European counterpart.
The global flight to safety was further reinforced by an intraday slump in the US Treasury bond yields, which kept a lid on the attempted USD recovery from six-month lows, albeit did little to ease the bearish pressure surrounding the major.
The shared currency further found support from hotter-than-expected prelim German consumer inflation figures. In fact, the headline CPI is anticipated to have risen by 1.5% YoY rate as compared to 1.1% previous and 1.4% expected.
Adding to this, the Harmonised Index of Consumer Prices (HICP) also bettered market expectations and came in at 1.5% YoY and 0.6% MoM as compared to the previous month’s reading of 1.2% and -0.8% respectively.
Moving ahead, market participants now look forward to the release of the US ISM Manufacturing PMI, which might produce some short-term trading opportunities later during the early North-American session on Friday.
The key focus, however, will remain on the latest FOMC monetary policy meeting minutes, which will play a key role in influencing the near-term USD price dynamics and eventually help determine the pair’s next leg of a directional move.
Technical levels to watch
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