EUR/USD flirting with daily lows near 1.1260
|- EUR/USD loses some shine after testing 1.1300 and above.
- German Industrial Production contracted 1.9% MoM in April.
- US Non-farm Payrolls next of significance in the calendar.
The shared currency is now giving away part of its weekly gains and is prompting EUR/USD to recede some ground and test so far daily lows in the 1.1265/60 band.
EUR/USD looks to data
After testing fresh 2-month peaks above 1.1300 the figure in past sessions, the pair has sparked a correction lower to the current comfort-zone around 1.1260 on Friday.
As usual this week, USD-weakness was exclusively behind the recovery in spot amidst speculations of a Fed’s rate cut and rising trade tensions, while the ECB event lent extra wings to the European currency after its tone disappointed bears on Thursday.
In the calendar, German Industrial Production contracted at a monthly 1.9% during April, missing previous estimates, while trade surplus shrunk to €17.0 billion during the same period. Moving forward, French trade balance figures are also due seconded by Italian Retail Sales.
Across the pond, US Non-farm Payrolls will be on top of the agenda later in the day (185K exp.).
What to look for around EUR
The ECB did not sounded as dovish as expected yesterday despite revising slightly lower its forecasts for inflation and economic growth in the region for the next years and after members discussed restarting QE or event cutting rates at the meeting. So, rates are expected to remain at current levels at least through H1 2020, although the ECB convincing optimism on an eventual pick up in inflation figures and the economic activity appeared to remove some bearishness surrounding the shared currency. On the broader picture, the broad-based risk-appetite trends and USD-dynamics should dictate the sentiment surrounding the European currency for the time being, all in combination with developments from the trade front including the US, China, the EU and Mexico. On the political front, Italian politics is expected to remain a source of uncertainty and volatility, with the centre of the debate on the country’s opposition to EU fiscal rules.
EUR/USD levels to watch
At the moment, the pair is retreating 0.11% at 1.1267 facing the next support at 1.1214 (55-day SMA) followed by 1.1194 (21-day SMA) and finally 1.1116 (low May 30). On the other hand, a breakout of 1.1309 (high Jun.6) would target 1.1323 (high Apr.13) en route to 1.1343 (200-week SMA).
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.