EUR/USD advances to 5-day highs, can it take out 1.12?

After posting its lowest weekly close since May of 2017 at 1.1150, the EUR/USD pair staged a recovery on Monday and rose to its highest level in five days at 1.1186. As of writing, the pair was trading at 1.1181, adding 0.3% on a daily basis.

Earlier today, the data published by the European Commission showed that the Consumer Confidence Index in the eurozone dropped to -7.9 in April from -7.2 March while the Industrial Confidence Index fell to -4.1 from -1.6 and the Services Sentiment Index stayed unchanged at 11.5. Despite the mixed data, the oversold nature of the pair didn't allow it to continue to push lower as technical sellers are likely waiting for a correction before committing to another leg down.

On the other hand, the greenback came under modest selling pressure following today's data releases and is now looking to close the day in the negative territory below the 98 mark. 

The U.S. Bureau of Economic Analysis today reported that the core Personal Consumption Expenditure (PCE) Price Index on a yearly basis continued to move away from the Fed's 2% target as it came in at 1.6% to fall short of the market expectation of 1.7%. Although the underlying details of the report revealed that personal spending increased at its strongest pace since 2009 with 0.9% (MoM), the greenback struggled to gain traction. At the moment, the DXY is down 0.2% on the day at 97.86.

On Tuesday, first-quarter GDP data from the eurozone, which is expected to show a growth of 0.3% on a quarterly basis, will be looked upon for fresh impetus. Nevertheless, the pair's latest price action seems to be driven by the greenback's market valuation rather than a reaction to data from the euro area. Meanwhile, ahead of Wednesday's FOMC announcements, the greenback could continue to correct last week's gains and help the pair push higher.

Technical levels to consider