EUR/USD tumbles further, challenges 1.1200
|- The selling pressure now gathers traction around EUR.
- The greenback pushes higher to the 97.30 region.
- ECB noted trade tensions morphed into further uncertainty.
The offered tone around the European currency keeps picking up pace in the second half of the week and is now dragging EUR/USD to the vicinity of 1.1200 the figure, or fresh 4-week lows.
EUR/USD in 4-week lows
Spot came under renewed and strong selling pressure following a pick up in the demand for the greenback, particularly after weekly Initial Claims rose by 202K WoW, the lowest level since 1969. Still on the US docket, Challenger Job Cuts rose at a yearly 0.4% during March, or by 60.59K.
Furthermore around EUR, the ECB minutes noted members said rising uncertainty is tracking trade tensions, while the Council expects solid economic growth to make a comeback later in the year. According to the minutes, some members favoured an extension of the status quo in rates through the Q1 2020.
In the meantime, the pair appears to have resumed the underlying bearish trend despite President Trump said (tweeted) that US-China talks seem to be going well.
What to look for around EUR
In spite of the ongoing corrective rebound, EUR remains under pressure following poor results in Euroland. In fact, recent disappointing readings in the region somehow confirm that the slowdown in the bloc and the ‘patient-for-longer’ stance from the ECB could be among us for longer than expected. Against the backdrop of souring risk-appetite trend, the greenback should emerge stronger and is expected to keep weighing on spot for the time being. 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 retreating 0.12% at 1.1218 and faces the next support at 1.1183 (low Apr.2) followed by 1.1176 (low Mar.7) and finally 1.1118 (monthly low Jun.20 2017). On the upside, a breakout of 1.1254 (high Apr.1) would target 1.1277 (21-day SMA) en route to 1.1338 (200-week SMA).
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