EUR/USD bounces off lows near 1.1170 ahead of data
- EUR/USD recedes further and tests daily lows near 1.1170.
- EMU flash CPI figures, Retail Sales next of relevance.
- Dollar stronger as US-Iran tensions subside somewhat.
The recovery in the greenback is forcing EUR/USD to retreat from the area of weekly highs beyond 1.1200 the figure and to refocus on the 1.1170 region.
EUR/USD now looks to data, Middle East
After climbing to weekly tops above the 1.1200 barrier on Monday, the pair seems to have met some selling pressure pari passu with the improved note in the greenback, all on the back of easing tensions in the geopolitical scenario, which continues to be dominated by the US-Iran conflict.
In fact, the dollar managed to pick up some poise in response to the recovery in US yields, which in turn morphed into a wider gap vs. their European peers, therefore putting spot under renewed pressure.
Later in the session, all the attention will be on the release of the advanced inflation figures in Euroland for the month of December along with November’s Retail Sales. Across the pond, the publication of the ISM Non-Manufacturing will be the salient event.
What to look for around EUR
The pair has receded from recent highs beyond 1.1200 the figure, although some decent contention appears to have emerged in the 1.1130/25 band so far. Despite markets’ attention has now shifted to the US-Iran conflict, investors remain anxious about the sign of the US-China’s ‘Phase One’ deal (on January 13th?). On the more macro view, the slowdown in the region remains far from abated and continues to justify the ‘looser for longer’ monetary stance from the ECB and the cautious/bearish view on the European currency in spite of the ongoing (temporary?) recovery.
EUR/USD levels to watch
At the moment, the pair is losing 0.09% at 1.1186 and a breakdown of 1.1141 (200-day SMA) would target 1.1125 (2020 low Jan.3) en route to 1.1094 (55-day SMA). On the upside, the next resistance is located at 1.1205 (high Jan.6) seconded by 1.1222 (2020 high Jan.2) and finally 1.1249 (monthly high Aug.6 2019).