- The offered bias persists around the European currency.
- EMU, Germany Services PMI came in above estimates.
- US ISM Non-manufacturing next of significance in the calendar.
The selling mood around the shared currency remains well and sound in the first half of the week and is now prompting EUR/USD to fade the earlier recovery and refocus on the 1.1320 area.
EUR/USD offered ahead of data
Spot remains unable to attempt a serious rebound so far today amidst the continuation of the buying interest around the buck, which has pushed DXY to new multi-day highs.
EUR stayed mostly unchanged after Services PMIs in Euroland came in above estimates during February and despite Retail Sales expanded more than expected during the first month of the year.
Later in the session, the key ISM Non-manufacturing will be in centre stage along with the release of New Home Sales and the IBD/TIPP index.
What to look for around EUR
In line with the broader risk-associated complex, the shared currency continues to look to developments from the US-China trade negotiations for near term direction. Looking at the broader picture, the ECB is expected to remain in ‘pause mode’ for the foreseeable future amidst the ongoing slowdown in the region, while investors have practically priced out any up move in rates this year. In addition, political headwinds are expected to emerge in light of the upcoming EU parliamentary elections, where the focus of attention will be whether the populist choice manages to increase its presence in the Old Continent.
EUR/USD levels to watch
At the moment, the pair is losing 0.10% at 1.1327 and faces the next support at 1.1289 (low Jan.24) followed by 1.1234 (2019 low Feb.15) and finally 1.1216 (2018 low Nov.12). On the upside, a breakout of 1.1419 (high Feb.28) would target 1.1442 (38.2% Fibo of the September-November drop) en route to 1.1506 (200-day SMA).
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