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  • EUR/USD fades gains and resumes the downside.
  • ECB’s Coeure said QE is here to stay.
  • German, EMU ZEW survey next of relevance.

The selling pressure appears to have returned to the shared currency on Tuesday and is now forcing EUR/USD to recede to the area of recent lows around 1.1020.

EUR/USD offered ahead of ZEW

The pair is fading yesterday’s advance after ECB’s B.Coeure stressed that the ongoing ‘quantitative easing’ (QE) programme by the central bank will remain in place for as long as needed.

In addition, the better mood in the US-China trade scenario seems to have come back today, lifting yields and sponsoring the selling mood in around the safe havens, all in turn morphing into extra wings for the buck.

In the docket, the key ZEW survey in Germany and the broader euro area will be in the limelight later in the European morning. Across the pond, the NFIB index will be the only publication today along with speeches from FOMC’s R.Clarida and P.Harker.

What to look for around EUR

The selling mood in the euro dragged spot to fresh 3-week lows in the 1.1020/15 band, where it is now looking to stabilize. As usual, the firm note in the greenback and developments from the US-China trade scenario are expected to dictate the mood around the pair for the time being. On the macro view, the outlook in Euroland remains fragile and does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the medium term at least. In addition, the possibility that the German economy could slip into recession in Q3 remains a palpable risk for the outlook and is expected to weigh further on EUR in the short/medium term horizon.

EUR/USD levels to watch

At the moment, the pair is retreating 0.10% at 1.1021 and a break below 1.1016 (monthly low Nov.11) would target 1.1000 (psychological handle) en route to 1.0925 (low Sep.3). On the upside, the next hurdle lines up at 1.1106 (100-day SMA) followed by 1.1179 (monthly high Oct.21) and finally 1.1186 (61.8% Fibo of the 2017-2018 rally).