EUR/USD comes under pressure near 1.1080 ahead of ECB
|- EUR/USD fades Wednesday’s advance and challenges 1.1080.
- Global sentiment looks to the Chinese virus outbreak.
- The ECB is expected to be a ‘non-event’ later today.
The shared currency remains under pressure so far this week, with EUR/USD at least managing to rebound from weekly/yearly lows at 1.1070 recorded on Wednesday.
EUR/USD now looks to risk trends, ECB
The pair has so far maintained the side-lined theme in the lower end of the weekly range although still within the broader bearish view, which is expected to persist as long as the 55-day SMA continues to cap the upside.
On the broader scenario, the risk appetite trends continue to dominate the sentiment in the global markets, particularly driven by developments around the Chinese Wuhan coronavirus and its potential effects on global growth prospects.
Later in the day and absent releases in Euroland, the most relevant event will be the ECB meeting and the subsequent press conference by President C.Lagarde. Market consensus, however, sees the central bank refraining from acting on rates, as the Governing Council is still assessing the impacts of the latest stimulus package delivered in the last part of 2019.
What to look for around EUR
The pair remains under pressure near yearly lows in the 1.1080 region, always looking to USD-dynamics as the almost exclusive driver for the price action. In the meantime, markets’ attention has now shifted to a more data-dependent stance while the US-China trade front remains muted for the time being. On the more macro view, the slowdown in the region remains far from abated despite some positive results as of late in Germany and the euro area and continues to justify the ‘looser for longer’ monetary stance from the ECB, which is expected to maintain the current ‘wait-and-see’ stance for the next months. On the latter, market participants will pay close attention to any details regarding the bank’s strategic review, expected to kick in later in the year.
EUR/USD levels to watch
At the moment, the pair is retreating 0.08% at 1.1083 and a breakdown of 1.1070 (weekly/2020 low Jan.22) would target 1.1068 (100-day SMA) en route to 1.1039 (low Dec.6 2019). On the flip side, the next hurdle aligns at 1.1132 (200-day SMA) followed by 1.1172 (weekly high Jan.16) and finally 1.1186 (61.8% of the 2017-2018 rally).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.