EUR/USD picks up pace and advance to 1.1240, daily highs
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EUR/USD picks up pace and advance to 1.1240, daily highs

  • The pair moves higher and surpasses 1.1240.
  • German Industrial Production contracted 0.8% MoM.
  • US Retail Sales next on tap in the US calendar.

The shared currency has started the week on a positive mood so far, lifting EUR/USD to the area of daily highs in the 1.1240/45 band.

EUR/USD looks to data, sentiment

The pair is adding to Friday’s gains and keeps recovering from the ECB-sponsored sell-off last Thursday, managing to come back after bottoing out in fresh 2019 lows in the vicinity of 1.1180.

The softer tone in the greenback, in the meantime, is giving support to the rebound in spot while markets continue to digest the recently published US Non-farm Payrolls.

In the data universe, German Industrial Production surprised to the downside, contracting at a monthly 0.8% in January while the trade surplus shrunk to €18.5 billion during the same period.

What to look for around EUR

The sentiment around the shared currency is expected to remain under heavy pressure as market participants continue to adjust to the fresh dovish stance from the ECB and the prospects of no hikes at least until Q3-Q4 2020. 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 members.

EUR/USD levels to watch

At the moment, the pair is gaining 0.08% at 1.1240 and a breakout of 1.1312 (21-day SMA) would target 1.1372 (55-day SMA) en route to 1.1419 (high Feb.28). On the other hand, the next support aligns at 1.1176 (2019 low Mar.7) followed by 1.1118 (monthly low Jun.20 2017) and finally 1.1021 (high May 8 2017).

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