EUR/USD clinches daily tops near 1.1920, looks to US yields

EUR/USD leaves behind the negative start and retakes 1.19.
The dollar loses the grip and drops to session lows.
EMU’s Retail Sales expanded 3.0% MoM in February.

Pablo Piovano FXStreet

The single currency faded the initial offered bias and regains composure, lifting EUR/USD back above the 1.19 mark at the beginning of the week.

EUR/USD focused on US 10-year auction

EUR/USD so far reverses Friday’s downtick and retakes the 1.1900 neighbourhood on the back of the renewed selling note surrounding the greenback. The pair’s upside now targets monthly peaks near 1.1930 recorded on April 8.

In fact, the dollar gives away initial gains despite the positive performance of US 10-year yields, which now approach the 1.68% level ahead of the key auction scheduled for later on Monday.

In the euro docket, Retail Sales in the euro area expanded at 3.0% MoM in February and contracted 2.9% over the last twelve months.

What to look for around EUR

EUR/USD managed to finally surpass the 1.19 mark and clinch new 2-week tops around 1.1930 during last week, although the move lost some vigour soon afterwards. The near-term outlook, however, looks improved and would not be surprising to see a sustainable advance further north of 1.1900 in the next sessions. The recovery in the pair emerged in response fresh downbeat sentiment in the dollar and rising hopes of a sustained recovery in the Old Continent now that the vaccine rollout appears to have gained some pace.

Key events in the euro area this week: German, EMU ZEW survey (Tuesday) – Industrial Production, Lagarde speech (Wednesday) – German final March CPI (Thursday) – Eurogroup meeting, EMU final CPI (Friday).

Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the vaccine rollout. Probable political effervescence around the EU Recovery Fund.

EUR/USD levels to watch

At the moment, the index is gaining 0.13% at 1.1912 and faces the next up barrier at 1.1927 (weekly high Apr.8) followed by 1.1989 (weekly high Mar.11) and finally 1.2000 (psychological level). On the downside, a breach of 1.1704 (2021 low Mar.31) would target 1.1602 (monthly low Nov.4) en route to 1.1570 (2008-2021 support line).

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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