- EUR/USD consolidates losses below the 1.1400 mark.
- Dollar, yields rebound on better mood in the risk universe.
- EMU Q4 GDP figures next of relevance in the docket.
EUR/USD has broken below the 1.1400 support on Tuesday in response to the significant improvement in the risk-associated universe.
EUR/USD recedes from 2020 tops near 1.1500
After printing fresh yearly highs just pips away from 1.15 the figure at the beginning of the week, EUR/USD has come under renewed downside pressure amidst a noticeable rebound in the greenback along with the riskier assets.
Indeed, US yields manage to rebound from recent all-time lows and are lending extra wings to the greenback, which is in turn sponsoring the bounce in the US Dollar Index (DXY) off Monday’s multi-month lows.
The better mood in the risk complex came after President Trump said on Monday the US is considering some tax relief measures in order to alleviate the negative effects of the coronavirus on the economy. In the same line, Japan has also announced a stimulus package, which is helping to mitigate the sharp pick-up in the demand for the safe haven yen (and thus boosting USD/JPY back above the 104.00 mark).
Data wise in Euroland, another revision of Q4 GDP figures is due later along with quarterly employment figures. Across the pond, the only release will be the NFIB index later in the NA session.
What to look for around EUR
EUR/USD has quickly left behind the key barrier at 1.1400 the figure and advanced to new yearly highs near 1.1500 on Monday. In spite of the ongoing knee-jerk, the positive outlook around the euro remains sustained by USD-weakness amidst COVID-19 panic, shrinking US yields and the tangible probability of another interest rate cut by the Fed later in the month. Investors’ attention, in the meantime, should shift to the ECB event on Thursday. The central bank is expected to finish its “strategic review” (announced at its January meeting) by year-end, leaving speculations of any change in the monetary policy before that time pretty flat. This view, however, appears somewhat challenging in light of the ongoing concerns around the coronavirus and following recent moves by major central banks. On another front, recent better-than-expected results in both Germany and the broader Euroland appear to have re-ignited some optimism among investors regarding the possibility of some recovery in the region and the currency. This view is also supported by latest news of fiscal stimulus in Germany.
EUR/USD levels to watch
At the moment, the pair is losing 0.69% at 1.1358 and faces the next support at 1.1332 (weekly low Mar.10) seconded by 1.1239 (monthly high Dec.31 2019) and finally 1.1186 (61.8% Fibo of the 2017-2018 rally). On the upside, a break above 1.1495 (2020 high Mar.9) would target 1.1514 (high Jan.31 2019) en route to 1.1569 (2019 high Jan.10).
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.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.