- EUR/USD goes for another test to the vicinity of 1.1000.
- The Greenback loses momentum after earlier tops.
- German Industrial Production surprised to the upside.
EUR/USD has now reversed the initial pessimism and is heading to the 1.0980 region, or daily highs, following auspicious results from the German docket.
EUR/USD now focused on US calendar, trade
The pair appears to have met a formidable resistance in the 1.10 neighbourhood for the time being. This area is also coincident with the 21-day SMA and just above the key 3-month resistance line, today near 1.1020.
Investors, in the meantime, continue to look to the upcoming US-China trade talks on Thursday and Friday for a clearer direction in the global sentiment.
EUR has derived extra support after German Industrial Production unexpectedly expanded at a monthly 0.3% during August, reversing at the same time July’s 0.4% contraction.
Later in the day, US NFIB index is due seconded by September’s Producer Prices and speeches by Fed’s Powell and FOMC’s Evans and Kashkari.
What to look for around EUR
The pair is struggling to overcome the critical juncture at the 1.10 neighbourhood amidst alternating risk appetite trends. The resumption of the down trends is expected to pick up pace in tandem with the inability of the pair to surpass this area of resistance on a convincing fashion in the near term. In the meantime, the relentless slowdown in the region does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the next months. On another front, potential US tariffs on imports of EU cars remain well on the table, while the Brexit limbo and UK politics also adds to the current negative view.
EUR/USD levels to watch
At the moment, the pair is advancing 0.08% at 1.0979 and faces the next resistance at 1.1000 (monthly high Oct.7) followed by 1.1061 (55-day SMA) and finally 1.1109 (monthly high Sep.13). On the downside, a breakdown of 1.0948 (10-day SMA) would target 1.0879 (2019 low Oct.1) en route to 1.0839 (monthly low May 11 2017).
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