EUR/USD eases to 1.1220 on Brexit vote, upbeat U-Mich
|- The pair leaves the upper end of the range near 1.1240.
- PM May was defeated once again at today’s vote.
- Upside in EUR/GBP weighs on the pair after the vote.
EUR/USD is now shedding some ground to the 1.1220 region although it keeps the positive note for the time being.
EUR/USD gives away gains post-Brexit vote
Spot came under pressure following the sharp up move in EUR/GBP on the back of a new defeat of UK PM Theresa May at the Parliament. This time, May’s Brexit withdrawal option lost by 58 votes.
In addition, the pair is giving away some gains after the US Consumer Sentiment tracked by the U-Mich index surprised to the upside at 98.4 for the current month, while New Home Sales also came in above estimates, rising by 667K units during February.
What to look for around EUR
Market participants have left behind the recent and renewed dovish stance from the ECB, focusing instead on the broad risk-appetite trends, USD-dynamics and domestic data. Regarding the latter, and looking to the broader picture, the view of a slowdown in the bloc has been ‘confirmed’ last week following disappointing advanced PMIs in core Euroland, while yesterday’s poor German flash CPI also collaborated with the mood. This, in turn, should add to the idea of a ‘patient for longer’ stance from the ECB. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections, where the focus of attention will be on the potential increase of the populist option among voters.
EUR/USD levels to watch
At the moment, the pair is up 0.08% at 1.1228 and a break above 1.1298 (21-day SMA) would target 1.1357 (100-day SMA) en route to 1.1448 (high Mar.20). On the other hand, the next support emerges at 1.1209 (low Mar.29) followed by 1.1176 (low Mar.7) and finally 1.1118 (monthly low Jun.20 2017).
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