EUR/USD loses further momentum, drops below 1.1280

The selling bias around the European currency is picking up extra pace and is dragging EUR/USD to the area of fresh weekly lows near 1.1280.

EUR/USD in multi-day lows

Spot is intensifying the pessimism during the second half of the week, coming under further selling pressure after post-FOMC peaks beyond the key 1.1400 the figure (Wednesday).

Adding to the selling momentum, advanced manufacturing PMIs in core Euroland are now seen moving deeper into the contraction territory (below the 50 threshold) in March, according to Markit’s figures released earlier today.

Furthermore, yields of the 10-year Bunds have accelerated the downside today and have breached the psychological 0.0% milestone, adding to EUR weakness.

Other than the European docket, US flash manufacturing PMI is expected a tad lower this month at 52.5, while New Home Sales soared to 5.51M units - or 11.8% - during February, collaborating with the upbeat mood in the buck.

What to look for around EUR

Market participants have left behind the recent and renewed dovish stance from the ECB, focusing instead on the broad risk-appetite trends, USD-dynamics and domestic data. Regarding the latter, and looking to the broader picture, the view of a slowdown in the bloc has been ‘confirmed’ today in the wake of disappointing advanced PMIs in core Euroland. This, in turn, should add to the idea of a ‘patient for longer’ stance from the ECB. 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 down 0.83% at 1.1278 facing the next support at 1.1234 (low Feb.15) seconded by 1.1215 (2018 low Nov.12) and finally 1.1176 (2019 low Mar.7). On the flip side, a breakout of 1.1448 (high Mar.20) would target 1.1478 (200-day SMA) en route to 1.1514 (high Jan.31).