EUR/USD gains traction and moves to highs near 1.0860

EUR/USD testing daily highs in the 1.0860/65 band on Wednesday.
Italian Industrial Sales, New Orders next on the docket.
The collapse in oil prices weighs on the riskier assets.

Pablo Piovano FXStreet

The single currency manages to regain some poise early in the Old Continent on Wednesday, helping EUR/USD to advance to the area of daily highs in the 1.0860/65 band.

EUR/USD focused on data, coronavirus fallout

EUR/USD is navigating a consolidative range so far this week, always above the 1.0800 mark but still unable to surpass the key barrier at 1.0900 the figure.

In the meantime, markets’ attention remains on the developments from the coronavirus amidst efforts from governments to ease lockdown measures in order to re-activate the economic activity.

Later in the calendar, the Italian industrial sector will be in the limelight, as Industrial Sales and Industrial New Orders are due for the month of February. Across the pond, the House Price Index is due seconded by the EIA’s report on US crude oil inventories.

What to look for around EUR

The euro remains on a bearish note at the beginning of the week, always looking to developments from the coronavirus and its impact on the economy as the main driver of both sentiment and price action. On the more macro view, the single currency is expected to remain under scrutiny in the next periods in light of the forecasted contraction in the economy of the region in the first half of the year, relegating hopes of a strong recovery to Q3 and/or Q4. In the very near term, Thursday’s Eurogroup meeting will take centre stage, with potential announcement regarding extra stimulus to counter the impact of the COVID-19 on top of the debate.

EUR/USD levels to watch

At the moment, the pair is gaining 0.11% at 1.0867 and a break above 1.0990 (weekly/monthly high Apr.15) would target 1.1046 (200-day SMA) en route to 1.1147 (weekly high Mar.27). On the other hand, the initial support lines up at 1.0812 (weekly low Apr.17) followed by 1.0768 (monthly low Apr.6) and finally 1.0635 (2020 low Mar.23).

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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