- EUR/USD briefly drops to 1.1785 and rebounds afterwards.
- The greenback remains bid and recovers ground lost on Friday.
- ECB-speak coming up next in the euro docket.
EUR/USD moves to fresh lows in the 1.1790/85 band earlier in the session just to rebound and attempts to stabilize around the 1.1800 neighbourhood.
EUR/USD looks to ECB-speak, EU Summit
EUR/USD trims earlier losses and manages well to keep business above the key barrier at 1.18 the figure amidst a firmer dollar in the wake of the opening bell in Wall St.
In fact, the greenback left behind Friday’s deep pullback to the boundaries of the 93.00 support – when tracked by the US Dollar Index (DXY) – and manages to regain some composure at the beginning of the week, putting the risk universe under moderate downside pressure.
The dollar picked up pace on Monday in response to the lack of progress in the stimulus talks, as US policymakers struggle to find common ground and unveil another aid package to support the economy.
Earlier in the session, ECB’s Lagarde did not make any comments on monetary policy, focusing instead on the prospects of a digital euro. Later on Monday, ECB Board members Luis De Guindos, Fabio Panetta and Isabel Schnabel are also due to speak.
What to look for around EUR
EUR/USD has finally surpassed the 1.1800 yardstick although the up move run out of steam in the 1.1830 region so far. The pair’s outlook still remains constructive and bearish moves are deemed as corrective only. Further out, the positive bias in the euro remains underpinned by auspicious results from domestic fundamentals (which have been in turn supporting further the view of a strong economic recovery after the slump in the activity during the spring), the so far cautious stance from the ECB and the solid position of the EMU’s current account.
EUR/USD levels to watch
At the moment, the pair is losing 0.15% at 1.1811 and faces immediate contention at 1.1709 (38.2% Fibo of the 2017-2018 rally) seconded by 1.1612 (monthly low Sep.25) and finally 1.1495 (monthly high Mar.9). On the upside, a break above 1.1830 (weekly high Oct.6) would target 1.1917 (high Sep.10) en route to 1.1965 (monthly high Aug.18).