EUR/USD on a weak note, puts 1.1400 to the test
|- Spot remains on the defensive near the key 1.1400 handle.
- The greenback appears sidelined around 96.00
- US Retail Sales, Factory Orders next up on the docket.
The demand for the European currency remains subdued in the middle of the week, prompting EUR/USD to resume the recent leg lower and test the vicinity of the 1.1400 handle, near daily lows.
EUR/USD looks to data
The pair is down for the second session in a row so far on Wednesday, putting the 1.1400 key support to the test and allowing the chance for a potential another visit to the 1.1300 neighbourhood, yearly lows.
Spot appears under some extra pressure today following the dovish tilt from the speech by ECB’s Draghi at the European Parliament on Tuesday evening. In fact, President M.Draghi acknowledged the economy in the region is experiencing a slowdown and it could be longer that expected, although he noted the central bank has the tools to face a recession if that scenario materializes.
Draghi also noted that the current ECB stance remains very accommodative, while a significant of monetary stimulus is still needed.
In the data space, earlier final December CPI figures in Germany matched the preliminary readings, while Italian industrial sector figures are due next. In the US docket, Retail Sales will be the main event seconded by Factory Orders, Durable Goods Orders, Trade Balance figures and the Fed’s Beige Book.
What to look for around EUR/USD
The likelihood of extra gains in spot is losing traction amidst a somewhat improved tone in the buck and the recent cautious/dovish tone from the ECB. Looking ahead, investors would likely pay increasing attention to the performance of the economy in the bloc amidst the ongoing slowdown and upcoming events including discussions around the French budget, Brexit and EU Parliamentary elections in May, while the probability of a technical recession in Germany in H2 2018 would also collaborate with the cautious sentiment.
EUR/USD levels to watch
At the moment, the pair is retreating 0.16% at 1.1395 facing immediate contention at 1.1382 (low Jan.15) seconded by 1.1379 (55-day SMA) and then 1.1306 (2019 low Jan.3). On the upside, a break above 1.1418 (21-day SMA) would target 1.1442 (38.2% Fibo of the September-November drop) and finally 1.1471 (100-day 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.