EUR/USD downside flirts with 1.1350 ahead of ZEW

The selling bias around the single currency remains well and sound during the first half of the week and is now dragging EUR/USD to test lows in the mid-1.1300s.

EUR/USD looks to data, risk trends

The continuation of the bid sentiment surrounding the greenback is putting spot under further pressure and forcing it to trade in the area of 3-week lows.

Sentiment in the risk-associated complex remains sour today as market participants continue to adjust to the recent headlines from the IMF, further evidence of a slowdown in the Chinese economy and lack of progress from the US-China trade negotiations. It is worth recalling that the Washington-based think tank revised lower its forecasts for global growth for the current year to 3.5% from 3.7%.

Data wise today, the ZEW Survey is due in Germany and the euro area, while attention should also remain on developments from the Brexit talks following May’s ‘Plan B’.

What to look for around EUR/USD

Today’s figures from the ZEW Survey should shed further light on the ongoing slowdown in Germany and the euro bloc. Moving further, EUR is expected to remain under scrutiny ahead of the ECB meeting due later in the week, where President Draghi is expected to deliver a cautious (dovish?) message. In the longer run, fundamentals in the region should remain in centre stage along with the upcoming EU parliamentary elections (May), Italian politics and French social unrest.

EUR/USD levels to watch

At the moment, the pair is losing 0.11% at 1.1351 and faces the next support at 1.1324 (200-week SMA) seconded by 1.1306 (2019 low Jan.3) and finally 1.1269 (monthly low Dec.14 2018). On the flip side, a break above 1.1380 (55-day SMA) would target 1.1415 (21-day SMA) en route to 1.1442 (38.2% Fibo of the September-November drop).