- EUR/USD loses the grip and slips back to 1.0930.
- Month/quarter-end flows lent support to the dollar.
- EMU’s flash CPI came in at 0.5% MoM and 0.7% YoY.
The selling pressure around the European currency remains well and sound so far this week with EUR/USD coming down under extra downside pressure and testing the 1.0930/25 band, or new 3-day lows.
EUR/USD weaker on USD-rebound
EUR/USD is accelerating the downside on Tuesday, particularly after leaving behind the key support at 1.10 the figure and falling to print new 3-day lows in the 1.0930/25 band.
Further downside pressure in the pair came in response to the continuation of the moderate buying interest in the greenback, in turn sustained by quarter/month-end flows, some funding stress and weakness in the buck’s peers.
Data wise in Euroland, flash inflation figures for the month of March see headline consumer prices rising 0.5% inter-month and 0.7% over the last twelve months. Core prices are expected to rise 0.5% MoM and 1.0% YoY.
In the US docket, house prices tracked by the S&P/Case-Shiller Index rose a tad below estimates at 3.1% from a year earlier in January, while the Conference Board will publish its Consumer Confidence gauge for the current month.
What to look for around EUR
The rally in EUR/USD appears to have met some interesting hurdle in the vicinity 1.1150 so far, sparking some corrective downside in consequence. In the meantime, dynamics around the greenback plus developments from the COVID-19 are expected to keep ruling the price action in the pair. On the macro view, recent better-than-forecasted PMIs in both Germany and the broader Euroland opened the door to some respite in the prevailing downtrend in fundamentals in the region, although the underlying stance still remains well on the negative side and aggravated by recession fears in response to the COVID-19 fallout as well as the probability of the re-emergence of disinflationary trends.
EUR/USD levels to watch
At the moment, the pair is losing 0.65% at 1.0970 and faces the next support at 1.0926 (weekly low Mar.31) seconded by 1.0814 (78.6% Fibo of the 2017-2018 rally) and finally 1.0777 (monthly low Feb.20). On the flip side, a break above 1.1079 (200-day SMA) would target 1.1147 (weekly high Mar.27) en route to 1.1186 (61.8% Fibo of the 2017-2018 rally).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.