EUR/USD keeps the bid tone around 1.1300, focus on Brexit vote

Still happy days for the shared currency, as EUR/USD has managed to retake the critical 1.1300 the figure and beyond, fully retracing the ECB-induced pullback last Thursday.

EUR/USD bid post-US data, looks to Brexit

Spot is up for the fourth consecutive session today, increasing the distance from last week’s 2019 lows in the 1.1180 region recorded in the wake of the ECB event.

The favourable environment for the riskier assets keeps sustaining the up move in sport, which has retaken the key 10-day SMA in the 1.1290 zone and advanced further north of the 1.1300 handle.

In the data universe, Industrial Production in the euro bloc surprised markets to the upside, rebounding more than expected during the first half of the year. In the US, headline Producer Prices rose 0.1% inter-month in February and 1.9% over the last twelve months, while Core prices gained 0.1% MoM and 2.5% YoY. Additional data saw Durable Goods Orders expanding at a monthly 0.4%, beating forecasts.

What to look for around EUR

Market participants appear to have already adjusted to the recent and renewed dovish stance from the ECB, focusing instead on the broad risk-appetite trends as the main driver of the price action in the near term. In the longer run, the performance of the economy in the region should remain in centre stage along with prospects of re-assessment of the ECB’s monetary policy. In this regard, it is worth mentioning that investors keep pricing in the first rate hike by the central bank at some point in H2 2019. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections, where the focus of attention will be on the potential increase of the populist option among voters.

EUR/USD levels to watch

At the moment, the pair is gaining 0.04% at 1.1291 and a break above 1.1304 (high Mar.13) would target 1.1311 (21-day SMA) en route to 1.1369 (55-day SMA). On the downside, the next support aligns at 1.1176 (2019 low Mar.7) followed by 1.1118 (monthly low Jun.20 2017) and finally 1.1021 (high May 8 2017).