EUR/USD clinches to gains near 1.1470

  • The pair alternates gains with losses early on Monday.
  • The greenback appears sidelined around 95.60 so far.
  • Disappointing Chinese trade data sparked risk-off sentiment.

After moving to daily highs near 1.1480 during overnight trade, EUR/USD has come under some selling pressure and tested the mid-1.1400s, or session lows, just to rebound afterwards.

EUR/USD struggles for direction below 1.1500

The pair has started the week near the 100-day SMA around 1.1480, although disappointing trade figures in China during the last month of 2018 have prompted sellers to return to the markets.

In fact, Chinese exports and imports unexpectedly contracted at an annualized 4.4% and 7.6%, respectively, spooking investors and adding to the increasing view that a slowdown in the Asian economy could be in the offing.

Data wise in Euroland, November’s Industrial Production figures in the bloc will be the only release of note today.

What to look for around EUR/USD

In the very near term, the pair would look to the performance of the greenback and the broader risk-appetite trends for direction along with developments from the US-China trade negotiations. In the longer run, the ECB ‘data-dependency’ should grow in significance in light of the apparent slowdown in the region’s fundamentals. This, along with the omnipresent effervescence in the Italian political scenario, the upcoming discussions in the French budget and a potential technical recession in Germany in H2 2018 could somewhat limit the scope for gains in EUR. In addition, the EU Parliamentary elections in May could be a gauge of the current situation around the populism in Europe.

EUR/USD levels to watch

At the moment, the pair is up 0.03% at 1.1471 facing the next hurdle at 1.1569 (2019 high Jan.10) seconded by 1.1585 (61.8% Fibo of the September-November drop) and finally 1.1621 (high Oct.16 2018). On the flip side, a breakdown of 1.1447 (10-day SMA) would target 1.1411 (21-day SMA) en route to 1.1306 (2019 low Jan.3).

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