EUR/USD climbs above 1.0800 as EU’s Current Account surplus surprises
|- EUR/USD climbs to 1.0833, lifted by Eurozone's widened current account surplus and quiet US market.
- ECB wage data and Lagarde's remarks indicate a measured easing stance, awaiting Q1 insights.
- US Leading Index and forthcoming FOMC minutes anticipated to guide EUR/USD amidst varying expectations.
The Euro extended its losses during the North American session, climbing above the 1.0800 figure after current account data in the Eurozone (EU) surpassed estimates. An absent economic calendar in the United States (US) after a holiday weakened the Greenback. The EUR/USD trades at 1.0833, up 0.52%.
EUR/USD gains on EU’s strength, eyes on Fed minutes
The EU’s Current Account surplus widened in December, exceeding estimates, rising to EUR 31.9 billion from EUR 22.5 billion a month earlier in seasonally adjusted figures. This means that, according to the yearly figures, the EU’s surplus increased to 1.8% of the bloc’s GDP from a deficit of 0.6% in the previous year.
Aside from this, the European Central Bank (ECB) revealed its indicator of wage settlements for last year’s Q4. Settlements dipped from 4.7% YoY to 4.5%. ECB’s President Christine Lagarde said that wage data will be vital in deciding when to begin monetary easing. According to BBG analysts, “ECB officials would probably like to see Q1 wage settlements (due out in May) before cutting rates, which points to June as the most likely choice. The market is pricing in less than 10% odds of a cut March 7, rising to 45% April 11 and fully priced on June 6.”
Across the pond, the US economic docket remains light, though the US Conference Board is expected to reveal the Leading Index for January, which is estimated to plunge by 0.3% MoM. On Wednesday, the schedule will gather pace, with the release of the latest Federal Open Market Committee (FOMC) minutes and Fed speakers crossing the wires.
EUR/USD Price Analysis: Technical outlook
The pair has jumped to the upside, in fundamental news from the EU, and is testing stir resistance at the 200-day moving average (DMA) at 1.0826. A daily close above that level could exacerbate a rally toward 1.0900 but, firstly, would need to reclaim the 50-DMA at 1.0891. Further upside is seen at around 1.0950. Conversely, if EUR/USD sellers keep the exchange rate below the 200-DMA, that could open the door to push the price below the 1.0800 mark. Once cleared, the next stop would be the February 20 low of 1.0761.
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