EUR/USD weaker, challenges 1.1000 ahead of data

• EUR/USD accelerates the downside to 1.1000.
• Stronger greenback weighs on the pair.
• EMU Industrial Production, US CPI, Powell next on tap.

The selling bias around the European currency stays well and sound so far this week, with EUR/USD now putting the key support at 1.10 the figure to the test.

EUR/USD looks to data, Powell

The pair remains well on the defensive in the area of 4-week lows in the 1.10 neighbourhood, always on the back of the persistent up move in the greenback and relentless optimism on the US-China trade front.

Regarding the latter, President Trump said at his speech on Tuesday that a trade deal with China is close, although he failed to shed more light in key issues like the roll over part of the ongoing tariffs and his meeting with Xi Jinping.

Later in the session, Industrial Production figures in the broad euro area will be in the limelight. Across the pond, the attention is expected to shift to key inflation figures during last month as well as the testimony by Fed’s Powell before the Congress.

What to look for around EUR

The selling mood in the euro has intensified and dragged spot to fresh 4-week lows in the 1.1000 region. As usual, the firm note in the greenback and developments from the US-China trade scenario are expected to dictate the mood around the pair for the time being. On the macro view, the outlook in Euroland remains fragile and does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the medium term at least. In addition, the possibility that the German economy could slip into recession in Q3 remains a palpable risk for the outlook and is expected to weigh further on EUR in the short/medium term horizon.

EUR/USD levels to watch

At the moment, the pair is retreating 0.03% at 1.1005 and a break below 1.0999 (monthly low Nov.13) would target 1.0925 (low Sep.3) en route to 1.0879 (2019 low Oct.1). On the upside, the next hurdle lines up at 1.1036 (55-day SMA) followed by 1.1102 (100-day SMA) and finally 1.1179 (monthly high Oct.21).