EUR/USD retakes 1.1100 and beyond on upbeat ZEW
|- EUR/USD quickly moves above the 1.1100 mark.
- German Economic Sentiment improves to 26.7 in January.
- Attention now shifts to Trump’s speech in Davos.
A sudden boost of buying interest pushed EUR/USD back above the key 1.1100 mark on Tuesday soon after the release of better-than-estimated ZEW Survey figures.
EUR/USD stays close to 1.1100, focus on Trump
The pair has regained extra oxygen and advanced – albeit briefly – to the area above 1.1100 the figure after the ZEW Survey showed the Economic Sentiment rebounded to 26.7 and 25.6 in Germany and the euro area, respectively, for the current month.
Additional data saw the German Current Conditions also bettering to -9.5 for the same period (from -19.9).
Moving forward, investors are now focused on the upcoming speech by President Trump at the WEF in Davos, amidst increasing concerns regarding the outbreak of the Wuhan coronavirus in China.
What to look for around EUR
The pair dropped to fresh yearly lows and lingers over the key 55-day SMA so far this week and always looking to USD-dynamics. Furthermore, the recent price action suggests that the 1.1180 region could be an interim top. In the meantime, markets’ focus is now seen shifting to a more data-dependent stance while the US-China trade front remains muted for the time being. On the more macro view, the slowdown in the region remains far from abated and continues to justify the ‘looser for longer’ monetary stance from the ECB, which is expected to maintain the current ‘wait-and-see’ stance, at least in the near-term, as per the recently published minutes (Accounts) from the December meeting.
EUR/USD levels to watch
At the moment, the pair is gaining 0.05% at 1.1100 and faces the next up barrier at 1.1134 (200-day SMA) followed by 1.1172 (weekly high Jan.16) and finally 1.1186 (61.8% of the 2017-2018 rally). On the downside, a breakdown of 1.1076 (weekly/2020 low Jan.20) would target 1.1066 (100-day SMA) en route to 1.1039 (low Dec.6 2019).
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