EUR/USD recovery stalled ahead of 1.1350

• Spot has managed to bounce off session lows near 1.1320.
• Further correction lower drags DXY to the 96.55/50 band.
• Talks of US tariffs on EU autos appear to be back.

Some selling pressure in the greenback is now helping EUR/USD to abandon the area of daily lows near 1.1320 and refocus instead on the 1.1350 region.

EUR/USD looks to risk trends, trade talks

Risk appetite trends are closely follow renewed concerns on the US-China trade dispute after President Trump ruled out a meeting with China’s Xi Jinping before the March 1 deadline. Still on the trade issue, US has once again warned the EU about the likely imposition of tariffs on autos.

The greenback, in the meantime, appears to have met a tough resistance around the 96.70 region and is no receding some ground for the first time after six consecutive daily advances.

Earlier in the session, the German trade surplus widened more than expected during December (€19.4 billion).

What to look for around EUR/USD

The extent and duration of the slowdown in Euroland continues to be in centre stage following recent figures from Q4 GDP in the region, the persistent negative streak from German fundamentals and the recently published EC forecasts, where both economic growth and inflation were revised lower for the current year. On the political scenario, May’s EU parliamentary elections should start to gather relevance with the days, paying special attention to the potential advance of populism in the region.

EUR/USD levels to watch

At the moment, the pair is losing 0.01% at 1.1339 and a break below 1.1324 (low Feb.7) would aim for 1.1289 (2019 low Jan.24) en route to 1.1269 (monthly low Dec.14 2018). On the other hand, the next hurdle emerges at 1.1389 (55-day SMA) seconded by 1.1429 (100-day SMA) and finally 1.1442 (38.2% Fibo of the September-November drop).