EUR/USD clings to gains around 1.1080 on German data
- EUR/USD keeps the area of 1.1080 ahead of data releases.
- The Greenback stays bid near weekly highs.
- German unemployment rate stayed put at 5.0%.
The single currency is looking to reverse the weekly leg lower and takes EUR/USD to the 1.1080 region for the time being.
EUR/USD unchanged on data
The pair alternates gains with losses early in the European session in the second half of the week, coming down under moderate selling pressure following Monday’s tops in the 1.1160/65 band.
Spot navigates the lower end of the range amidst no fresh headlines from the US-China trade front other than rising speculations over the potential resumptions of negotiations in the near term.
On another front, uncertainty in the UK political scenario and Brexit remains on the rise after PM B.Johnson suspended the Parliament yesterday, threatening to ignite some risk-off sentiment.
In the docket, German jobless rate remained unchanged at 5.0% in July, while the Unemployment Change rose by 4K for the current month.
Additional releases in Euroland noted advanced Spanish inflation figures tracked by the HCPI are seen contracting 0.1% MoM during August and rising 0.4% over the last twelve months. In France, Consumer Spending grew more than expected 0.4% MoM during July and Q1 GDP expanded 0.3% inter-quarter, bettering estimates.
Later in the day, several confidence/sentiment gauges are due in the broader euro zone along with key advanced German CPI. Across the pond, another revision of Q2 GDP will be the salient event.
What to look for around EUR
Spot remains on the defensive against the backdrop of increasing trade concerns and declining bond yields. While the situation in Italy has improved considerably in the last hours, the final word is yet to be said. In the meantime, ECB’s preparations for a fresh wave of monetary stimulus (most likely to be announced in September), including a potential reduction of interest rates, the re-start of the QE programme and a probable tiered deposit rate system, continues to weigh on EUR and caps any bullish attempts in the pair
EUR/USD levels to watch
At the moment, the pair is gaining 0.02% at 1.1079 and a break above 1.1128 (21-day SMA) would target 1.1186 (61.8% Fibo of the 2017-2018 up move) en route to 1.1199 (55-day SMA). On the flip side, immediate contention emerges at 1.1051 (low Aug.23) ahead of 1.1026 (2019 low Aug.1) and finally 1.0839 (monthly low May 11 2017).
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.
