EUR/USD unchanged above 1.10 post-ZEW, now looks to US data
|- EUR/USD keeps the familiar range above 1.10.
- German, EMU Economic Sentiment surprised to the upside.
- US Industrial Production next of relevance on the docket.
The bid tone around the European currency stays unaltered so far on Tuesday, taing EUR/USD to the 1.1010/15 band following releases in the euro calendar.
EUR/USD unfazed post-ZEW
The pair keeps the tepid recovery alive following Monday’s sharp retracement to the area below the 1.1000 handle amidst a solid tone in the Greenback and rising geopolitical jitters in the Middle East.
EUR remained apathetic today despite the German/EMU ZEW survey came in on the upbeat side finally. In fact, the German Economic Sentiment ‘improved’ to -22.5 for the current month while the Current Conditions component missed estimates and dropped to -19.9. The Economic Sentiment in the broader euro area also surpassed expectations at -22.4, although it is still entrenched well into the negative territory.
Across the ocean, Industrial/Manufacturing Production will be in the limelight followed by Capacity Utilization, the NAHB index and TIC Flows.
What to look for around EUR
The selling interest around the single currency has resumed this week, forcing EUR/USD to re-test the 1.10 neighbourhood and a tad below on Monday. In fact, EUR lost some shine following the recent peaks beyond 1.11 the figure, recorded after the ECB announced €20 billion/month in bond purchases under the re-launched QE programme. The occasional recovery in spot, however, is seen as corrective only always against the backdrop of unremitting slowdown in the region, looser for longer monetary conditions by the ECB and the likelihood that the German economy could slip into technical recession in Q3. Adding to this gloomy scenario, potential US tariffs on imports of EU cars remain well on the table, while persistent uncertainty around Brexit adds to the downbeat outlook.
EUR/USD levels to watch
At the moment, the pair is gaining 0.12% at 1.1012 and faces the next hurdle at 1.1109 (monthly high Sep.13) seconded by 1.1163 (high Aug.26) and finally 1.1179 (100-day SMA). On the flip side, a break below 1.0990 (low Sep.16) would target 1.0925 (2019 low Sep.3) en route to 1.0839 (monthly low May 11 2017).
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