EUR/USD recedes from tops near 1.1420 on US GDP

• The pair loses some momentum and returns to 1.1400.
• The greenback met support in the 95.80 area so far.
• US GDP expected at 2.6% in Q4 2018.

The current rebound in the greenback has prompted EUR/USD to retreat from earlier 3-week highs near 1.1420.

EUR/USD trims gains on upbeat GDP

The earlier uptick in spot to the 1.1420 area lost impetus after the first revision of US GDP surprised to the upside today, showing the economy is seen expanding at an annualized 2.6% during the fourth quarter, beating previous estimates.

Earlier, preliminary inflation figures in Germany tracked by the CPI expect consumer prices to raise 0.5% MoM and 1.6% on a year to February. Measured by the broader HICP, prices are expected to gain 0.5% inter-month and 1.7% over the last twelve months.

What to look for around EUR

The recent upbeat momentum in the single currency has been almost exclusively in tandem with USD-dynamics. In the meantime, EUR continues to look to developments from the US-China trade talks for near term direction, while the effervescence on the US-EU trade front appear somewhat relegated so far. Mixed results from German flash inflation figures add to recent poor prints from the euro docket and the ‘reality check’ from the ECB minutes, all exacerbating concerns over the deterioration in the bloc’s fundamentals and pouring cold water over expectations of the start of the tightening cycle by the ECB in the next months, which somehow undermines potential upside in spot.

EUR/USD levels to watch

At the moment, the pair is gaining 0.15% at 1.1386 and a breakout of 1.1419 (high Feb.28) would target 1.1442 (38.2% Fibo of the September-November drop) and then 1.1510 (200-day SMA). On the other hand, the next support is located at 1.1350 (21-day SMA) seconded by 1.1343 (10-day SMA) and finally 1.1275 (low Feb.19).