EUR/USD flirting with weekly lows near 1.1280

The selling pressure is now picking up pace around the European currency and is dragging EUR/USD to the area of weekly lows in the 1.1280/75 band.

EUR/USD focused on yields, Lagarde, data

The pair is consolidating in the lower end of the weekly range around 1.1280 as market participants continue to adjust to the appointment of (now former) IMF’s Christine Lagarde to succeed Mario Draghi at the European Central Bank (ECB).

In addition, EUR is deriving extra downside pressure after yields of the German benchmark 10-year Bund are trading in all-time lows near the -0.40% level, favouring a wider spread vs. the US 10-year reference and therefore lending wings to the buck.

Later in the session, final June services PMIs are unlikely to be a market mover, while all the attention should be on the US docket, where the ADP report and the ISM Non-manufacturing will be the salient events.

What to look for around EUR

The renewed dovish stance from the ECB and USD-dynamics should dictate the price action around the pair in the near term, helped at the same time by the broad risk-appetite trends and the recent positive developments from the US-China trade front. Further out, the slowdown in the region looks unremitting and reinforces at the same time the current dovish attitude of the central bank. On the political front, Italian politics is expected to remain a source of uncertainty and volatility for EUR, with the centre of the debate always gyrating around the country’s opposition to EU fiscal rules.

EUR/USD levels to watch

At the moment, the pair is retreating 0.02% at 1.1282 and faces the next down barrier at 1.1275 (monthly low Jul.2) followed by 1.1259 (100-day SMA) and finally 1.1181 (low Jun.18). On the flip side, a break above 1.1337 (200-day SMA) would target 1.1412 (high Jun.25) en route to 1.1448 (monthly high Mar.20).