EUR/USD tumbles to new weekly lows near 1.1060

• EUR/USD fades the initial move to 1.1100 and beyond.
• Flash PMIs surprised to the upside in August.
• Jackson Hole Symposium kicks in later today.

Sellers have quickly returned to the markets after EUR/USD hit the 1.1110/15 band earlier in the session in response to upbeat PMIs results.

EUR/USD upside limited around 1.1120

The pair has quickly reversed the bullish attempt to the 1.1100 barrier and above following better-than-expected advanced PMIs in core Euroland for the current month.

The knee-jerk managed to record new weekly lows near 1.1060 and it has opened further the door for a potential retracement to the 2019 low at 1.1026 anytime soon.

Still in the euro area, minutes from the last ECB meeting noted the slowdown appears to last longer than initially estimated, while members showed concern over the decline in longer term inflation expectations.

In the meantime, and with the FOMC minutes and flash PMIs out of the way, the next big event will be the Jackson Hole Symposium that starts today on ‘Challenges for Monetary Policy’.

What to look for around EUR

EUR has finally succumbed to the downside pressure although another test of YTD lows in the proximity of 1.1020 remains elusive for the time being. Renewed buying interest surrounding the buck, expectations of ECB easing and Italian politics are seen driving the mood around the shared currency at the moment. That said, sustained bullish attempts in the pair still look flimsy amidst ECB’s preparations for a fresh wave of monetary stimulus (most likely to be announced in September), including a potential reduction of interest rates, the re-start of the QE programme and a probable tiered deposit rate system. This scenario has been confirmed as of late following poor results from the euro-docket, adding to the unremitting deterioration of the economic outlook in the region.

EUR/USD levels to watch

At the moment, the pair is losing 0.06% at 1.1077 and faces immediate contention at 1.1063 (low Aug.22) seconded by 1.1026 (2019 low Aug.1) and finally 1.0839 (monthly low May 11 2017). On the other hand, a breakout of 1.1136 (21-day SMA) would target 1.1218 (55-day SMA) en route to 1.1282 (high Jul.19).