EUR/USD: Struggle to take-out 1.1300 continues ahead of Eurozone data

• Tracks the gains in GBP/USD amid Brexit delay hopes, but upside capped by the recovery in Treasury yields.
• Next of relevance remains the Eurozone industrial output and US data sets.

Fresh bids emerged near the 1.1280 level, prompting a tepid bounce in the EUR/USD pair back towards the 1.13 handle, but the bears continue to guard the last, keeping the upside attempts capped.

Focus on Eurozone macro news, as economic slowdown concerns loom

Following a break below the 1.1300 level in early Asia, the spot continues to consolidate in a 20-pips tight range, with the downside cushioned by the bullish tone seen around the British pound amid increased odds of a Brexit delay while the upside attempts remain limited by the rebound in Treasury yields. Treasury yields dipped across the time horizon following Tuesday’s US CPI miss that supported the case for the Fed’s patience stance on the rate hikes.

On the EUR-side of the story, the recent comments by the ECB Governing Council member Angeloni, expressing concerns on the weakening Eurozone economy, could also remain a drag on the prices. However, expectations of an upturn in the Eurozone industrial activity for the month of January combined with the latest leg down in the greenback helps keep the buoyant tone intact around the pair.

In the view of analysts at Citibank, the Eurozone industrial output is expected to bounce in the month of January. “Looking ahead to 1Q-19, surveys continue to suggest that the level of order books remains high compared to the stocks of finished goods, indicating that IP growth could still re-accelerate in case of worries about global trade (US-China trade conflict and Brexit) dissipating somewhat.”

Also, of note remains the US PPI and durable goods data due later in the NA session at 1230 GMT for fresh trading impetus on the major.

EUR/USD Technical Levels