EUR/USD clings to daily gains in the mid-1.10s
|- Upside in EUR/USD remains limited by 1.1060/65.
- US Retail Sales came in on the soft side in September.
- Fed’s Beige Book coming up next.
The single currency keeps the upbeat mood in the middle of the week, with EUR/USD managing to reverse Tuesday’s test of the 1.0990 region and return to the mod-1.10s, where it is currently consolidating.
EUR/USD bolstered by weak USD, risk-on trends
The pair is advancing for the second session in a row on Wednesday, leaving behind the pessimism at the beginning of the week and always tracking the renewed selling bias surrounding the buck and Brexit developments.
Spot has also found extra legs on the poor results from US Retail Sales for the month of September. In fact, headlines sales unexpectedly contracted 0.3% inter-month and core sales dropped 0.1%, also coming in short of estimates.
EUR, in the meantime, remains vigilant on market chatter regarding the potential fiscal stimulus in Germany as well as volatile headlines coming from the Brexit negotiations that directly impact on the mood in the risk-complex.
What to look for around EUR
The corrective upside remains well in place for the time being although well capped by the 1.1060 region amidst alternating mood in the risk trends and a steady performance from the Greenback. Looking at the broader picture, the relentless slowdown in the region does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the longer run. On another front, the Brexit process and its impact on the risk-associated complex is also affecting the price action around the pair while sporadic rumours of German fiscal stimulus also add volatility to the market.
EUR/USD levels to watch
At the moment, the pair is gaining 0.10% at 1.1043 and faces the next barrier at 1.1062 (monthly high Oct.11) seconded by 1.1109 (monthly high Sep.13) and finally 1.1139 (100-day SMA). On the flip side, a break below 1.0984 (21-day SMA) would target 1.0879 (2019 low Oct.1) en route to 1.0839 (monthly low May 11 2017).
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