- The pair comes under pressure in sub-1.1200 levels.
- The greenback has started the week on a positive footing.
- EMU Sentix Index, Services PMI in focus later today.
The selling pressure have re-emerged around the single currency and the rest of its risk-associated peers at the beginning of the week and is now dragging EUR/USD back below the 1.1200 key support.
EUR/USD weaker on trade jitters
The pessimism around investors seems to have returned on Monday in tandem with fresh concerns in the US-China trade front.
In fact, trade jitters in the global markets resurfaced today after President Trump said on Sunday the US could increase existing tariffs on Chinese goods worth $200 billion while adding 25% tariff on an extra $325 billion worth of products, all denting the recent fresh wave of optimism around the riskier assets.
Data wise in Euroland, final Services PMIs are due later in the morning along with the Investor Confidence gauge by the Sentix Index and Retail Sales in the bloc for the month of March.
What to look for around EUR
Recent data in Euroland and Germany allowed market participants to believe that some healing process could be under way in the region amidst the ongoing slowdown. However, this scenario needs confirmation in the next months, while the current ‘neutral/dovish’ stance from the ECB is expected to persist for the reminder of the year and probable H1 2020. The broad-based risk-appetite trends and USD-dynamics are posed to rule the sentiment surrounding the European currency for the time being, all in combination with the onoging US-China trade dispute and potential US tariffs on EU products. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections in late May, as the populist option in the form of the far-right and the far-left movements appears to keep swelling among voting countries.
EUR/USD levels to watch
At the moment, the pair is losing 0.06% at 1.1193 and faces the next support at 1.1109 (2019 low Apr.26) seconded by 1.0839 (monthly low May 11 2017) and finally 1.0569 (monthly low Apr.10 2017). On the other hand, a break above 1.1264 (high May 1) would target 1.1271 (55-day SMA) en route to 1.1323 (high Apr.17).
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