EUR/USD corrects from recent tops, back around 1.1080

EUR/USD gives away part of Friday’s gains.
Final January manufacturing PMIs due later in Euroland.
US ISM Manufacturing next of relevance later in the session.

Pablo Piovano FXStreet

EUR/USD los upside momentum at Friday’s peaks in levels just shy of the key barrier at 1.1100 the figure.

EUR/USD looks to data, coronavirus

The pair is losing ground for the first time after two consecutive daily advances, including a test of the 1.1100 vicinity on Friday on the back of the moderate sell-off in the greenback.

The buck has started the week on a better note and is motivating the risk-associated complex to shed part of recent gains. In the meantime, coronavirus fears remain on the rise and are expected to keep driving the sentiment in the global markets for the time being.

Later in the region, the focus of attention (or part of it) will be on the final prints of the manufacturing PMI in the euro region. In addition, ECB’s VP L. de Guindos will participate in an event in Athens, while President C.Lagarde is due to speak in Germany.

In the US docket, the manufacturing gauge by the ISM will take centre stage. Additionally, Atlanta Fed R.Bostic (2021 voter, centrist) is due to speak.

What to look for around EUR

The pair comes under some selling pressure at the beginning of the week after reaching the boundaries of 1.1100 the figure on Friday. In the meantime, dynamics around the buck are expected to remain the exclusive driver of the pair’s price action for the time being along with alternating risk appetite trends in response to developments from the Wuhan coronavirus. On another scenario, the ECB is expected to finish its strategic review (announced last Thursday) by year-end, leaving speculations of any change of the monetary policy before that time pretty flat. Further out, some better-than-expected results in the euro region as of late seem to have lent support to the idea that the bloc could have left the worst behind, although that view looks premature, to say the least.

EUR/USD levels to watch

At the moment, the pair is losing 0.19% at 1.1073 and a breakdown of 1.1068 (100-day SMA) would target 1.0992 (weekly/2020 low Jan.29) en route to 1.0981 (monthly low Nov.29 2019). On the flip side, the initial hurdle emerges at 1.1094 (weekly high Jan.31) followed by 1.1118 (weekly high Jan.21) and finally 1.1126 (200-day SMA).

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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