EUR/USD flirting with daily highs near 1.1270, data on sight

The bid tone around the European currency is once again pushing EUR/USD to the top end of the recent range around 1.1270, where coincides the 100-day SMA.

EUR/USD propped by USD-selling, looks to data

The pair is navigating its fourth consecutive session with gains so far on Wednesday, always bolstered by the persistent selling pressure around the greenback as the almost exclusive catalyst for the up move.

In fact, market chatter highlighting the possibility of a Fed move on rates – most likely to the downside – in the medium term has put the buck under renewed downside pressure. This idea has been somewhat reinforced by Chief J.Powell at his speech yesterday.

In today’s calendar, final services PMIs in Euroland for the month of May are unlikely to move the dial in the markets, although investors would be more interested in the publication of Producer Prices during last month and the performance of Retail Sales in April.

Across the pond, an initial gauge of the US labour market is due via the ADP report seconded by the ISM Non-manufacturing and speeches by FOMC’s Clarida, Bowman and Bostic.

What to look for around EUR

Lower-than-expected preliminary inflation figures in Euroland, albeit anticipated, showed the absence of conviction in the previous up tick in consumer prices and opens the door at the same time for a potential dovish tilt at the ECB event on Thursday. On the broader picture, the broad-based risk-appetite trends and USD-dynamics should dictate the sentiment surrounding the European currency for the time being, all in combination with developments from the trade front including the US, China, the EU and Mexico. On the political front, Italian politics has resurfaced as a source of uncertainty and volatility, with the centre of the debate on the country’s opposition to EU fiscal rules.

EUR/USD levels to watch

At the moment, the pair is advancing 0.14% at 1.1267 and a breakout of 1.1277 (high Jun.4) would target 1.1283 (38.2% Fibo of the 2019 drop) en route to 1.1323 (high Apr.13). On the other hand, the next down barrier lines up at 1.1217 (55-day SMA) followed by 1.1190 (21-day SMA) and finally 1.1116 (low May 30).