EUR/USD drops to daily lows near 1.0920, Sentix bounces
|- EUR/USD loses the grip and tests the 1.0920 region.
- The dollar regains poise and weighs on the pair on Monday.
- The Sentix Index came in at -41.8 for the month of May.
The shared currency has started the week on the negative footing and is now dragging EUR/USD to the area of daily lows around 1.0920.
EUR/USD weaker on risk-off sentiment
Following three consecutive daily advances, EUR/USD is now seeing some selling pressure re-emerge against the backdrop of an improved mood surrounding the greenback.
In fact, the risk-off sentiment prevails so far on Monday and is lending extra support to the buck in response to the resurgence of the US-China trade war after President Trump slipped the chance of imposing extra tariffs on Chinese goods.
In the euro calendar, the Investor Confidence tracked by the Sentix Index “improved” a tad to -41.8 for the month of May, while the final manufacturing PMI in Germany and the broader Euroland came in at 34.5 and 33.4, respectively, in April.
Across the pond, Factory Orders for the month of March will be the sole release on Monday.
What to look for around EUR
The euro traded on a firmer note in the second half of last week, pushing the pair briefly above the psychological 1.1000 mark on Friday albeit closing the session below it. Positive headlines highlighting further decline in COVID-19 deaths and infected cases in Europe – particularly in Spain and Italy – coupled with measures announced to gradually lift the lockdown in some European economies also helped to bolster the upside momentum in the pair and eclipsed at the same time the negative flow of poor results from fundamentals and the dovish tilt from the ECB at the Thursday’s event.
EUR/USD levels to watch
At the moment, the pair is losing 0.38% at 1.0937 and faces the next support at 1.0814 (78.6% Fibo of the 2017-2018 rally) seconded by 1.0727 (weekly low Apr.24) and finally 1.0635 (2020 low Mar.23). On the upside, a breakout of 1.1019 (weekly/monthly high May 1) would target 1.1033 (200-day SMA) en route to 1.1147 (weekly high Mar.27).
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