EUR/USD leaps to 1.1300, new daily highs
|- The pair reverts the initial pessimism and moves to session tops.
- A bout of USD-selling sent DXY to fresh daily lows in sub-97.00 levels.
- US NFIB index drops to 101.2, lowest in Trump administration.
After recording fresh 2019 lows in the 1.1260/55 in early trade, EUR/USD managed to regain some traction via USD-weakness and is now flirting with daily highs near 1.1300 the figure.
EUR/USD bolstered by USD-selling, risk
Spot is consolidating the bullish attempt after falling as low as the vicinity of 1.1250, always tracking the change of heart in the risk-associated complex, particularly in response to rising hopes of a probable US-China trade deal.
In addition, yesterday’s deal in the US political arena is expected to prevent another government shutdown and is also propping up the upbeat mood in the global markets.
In the US docket, the NFIB index dropped to the lowest level since Trump assumed office, while December JOLTs Job Openings and the API report are due later. In addition, Fed’s J.Powell and KC Fed E.George are due to speak.
What to look for around EUR/USD
Both the ECB and European Commission are now confirming the slowdown in the euro bloc following their recent revised projections for economic growth and inflation, acknowledging at the same time that the ongoing deceleration in fundamentals could be longer than expected. Adding to this picture, Germany could have likely entered into recession in Q4, while the apparent recovery in the autos sector in recent months would not be enough to spark the immediate rebound in the first economy of the bloc. In addition, political concerns remain well and sound following the recent Italy-France dispute with the ‘yellow-vests’ in centre stage ahead of the key EU parliamentary elections in May. All in all, it seems the start of the ECB tightening cycle has to wait longer within the current state of things in the region and abroad, leaving EUR exposed to a bumpy road ahead and prone to further weakness.
EUR/USD levels to watch
At the moment, the pair is gaining 0.17% at 1.1294 facing the next hurdle at 1.1356 (23.6% Fibo of the September-November drop) seconded by 1.1386 (55-day SMA) and finally 1.1420 (100-day SMA). On the other hand, a break below 1.1257 (2019 low Feb.12) would target 1.1215 (2018 low Nov.12) en route to 1.1118 (monthly low Jun.20 2017).
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.