EUR/USD approaches 1.1300 on USD-weakness

EUR/USD gains extra pace and now looks to 1.1300.
The greenback remains on the defensive below 97.00.
EC’s Consumer Confidence next on the euro docket.

Pablo Piovano FXStreet

The single currency has regained extra traction in past hours and is now pushing EUR/USD to levels closer to the critical handle at 1.1300 the figure.

EUR/USD moves higher on USD-selling

The renewed and strong selling bias surrounding the greenback is once again lifting spot to the vicinity of the 1.1300 mark today.

In fact, extra selling pressure in the buck turned up yesterday after the FOMC delivered a dovish message. The Fed has now shifted to a more accommodative stance – in line with its G10 peers - and opened the door to rate cuts in the near term.

However, the continuation of the up move in the pair is expected to be short-lived, as the ECB too is now looking to the possibility of lower rates and/or restarting the QE programme if the outlook on the region worsens and inflation fails to move closer to the bank’s target.

Moving forward, the advanced Consumer Confidence gauge by the European Commission is only due in Euroland, while the Philly Fed index, Initial Claims and Current account results are expected across the pond.

What to look for around EUR

The renewed dovish stance from the ECB and USD-dynamics appear to be dictating the price action around the European currency for the time being, relegating to a secondary role the broad risk-appetite trends and trade tensions. Furthermore, the slowdown in the region looks unremitting and reinforces at the same time the current attitude of the central bank. On the political front, Italian politics is expected to remain a source of uncertainty and volatility for EUR, with the centre of the debate gyrating around the country’s opposition to EU fiscal rules as well as the challenging tone from LN’s M.Salvini.

EUR/USD levels to watch

At the moment, the pair is advancing 0.44% at 1.1275 and a breakout of 1.1347 (high Jun.7) would target 1.1353 (200-day SMA) en route to 1.1448 (monthly high Mar.20). On the downside, immediate contention is located at 1.1181 (low Jun.18) seconded by 1.1176 (monthly low Mar.7) and finally 1.1115 (low May 30).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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