EUR/USD holding on above 1.1200 ahead of Draghi, ZEW

The bid tone surrounding the shared currency remains well and sound so far this week and is now lifting EUR/USD to the area of daily highs in the boundaries of 1.1240.

EUR/USD now looks to Draghi, data

Spot is extending the optimism in the first half of the week, putting further distance from Monday’s lows in the 1.1200 neighbourhood amidst some selling pressure around the buck.

In the meantime, US-China trade tensions and rumours on potential rate cut by the Fed in the near term continue to be the exclusive drivers of the markets’ sentiment for the time being.

Later in the day, President M.Draghi will speak at the ECB Forum in Sintra (Portugal), while the publication of the ZEW survey in Germany and Euroland should also keep the attention on the European currency.

What to look for around EUR

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 US-China trade spat. On the political front, Italian politics is expected to remain a source of uncertainty and volatility for EUR, with the centre of the debate gyrating around the country’s opposition to EU fiscal rules as well as the challenging tone from LN’s M.Salvini. EUR, however, is expected to remain under scrutiny amidst the renewed dovish stance from the ECB and the ongoing slowdown in the region.

EUR/USD levels to watch

At the moment, the pair is gaining 0.11% at 1.1230 and a break above 1.1347 (high Jun.7) would target 1.1356 (200-day SMA) en route to 1.1448 (monthly high Mar.20). On the other hand, initial support aligns at 1.1202 (low Jun.14) seconded by 1.1200 (low Jun.6) and finally 1.1115 (low May 30).